Rent-Seeking Language Models: Reward Models Set the Prices, Frequent Audits Curb the Rent

arXiv:2610.19832v1 Announce Type: new Abstract: Reward model overoptimization in RLHF is usually described as reward hacking. We recast it as rent-seeking: the policy, a firm, earns reward from a regulator, the proxy reward model, that true quality does not back. The lens turns overoptimization into measurable quantities, namely rent, a capture index and deadweight loss, and into testable predictions from the economics of regulation. In a fixed, version-controlled testbed with three model families, accuracy-matched proxy reward models and two gold reward models, RL turns 41% to 66% of its proxy gain into rent while gold reward plateaus. Rent follows each regulator's prices. Neither proxy verifies facts, but one pays for confident specifics and the other for displays of diligence, so RL policies learn to fabricate details about nonexistent entities (97% to 100% of probes) or to deflect factual questions (67% to 98%). Kinship between policy and regulator adds a fixed premium of about 0.1 standard deviations but gives the policy no extra leverage under optimization. At a fixed expected fine, frequent mild audits beat rare severe ones, and random audits are as efficient per audit as targeted ones. Bringing the bunching estimator of tax economics to RL training, we also find a first sign that policies learn to stay just below a targeted audit's threshold.

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Source: arXiv cs.LG | 2026-10-15