Evolutionarily Stable Non-Compliance: A Game-Theoretic Analysis of Corporate Governance Failures

This paper demonstrates that corporate non-compliance can be evolutionarily stable: a strategy that, once established, cannot be invaded by compliant strategies. Using evolutionary game theory (Maynard Smith 1982), the analysis shows that when corporations operate at Level 1 intentionality while enforcement assumes Level 3, non-compliance becomes an Evolutionarily Stable Strategy (ESS). The paper formalizes three conditions under which non-compliance is ESS: (1) Expected penalties are lower than compliance costs, (2) Enforcement mechanisms assume moral reasoning that corporations lack, and (3) Regulatory capture creates feedback loops favoring non-compliant strategies. Empirical evidence from multiple enforcement regimes confirms these predictions: corporate recidivism rates (2.7-3.9× individual rates) reflect ESS dynamics, not enforcement failures. The framework integrates Maynard Smith's ESS analysis with Dennett's intentionality hierarchy, demonstrating why standard deterrence models systematically fail for corporate defendants. Policy implications: effective corporate governance requires mechanisms that remain stable under Level 1 intentionality—automatic sanctions, strict liability, and architectural constraints that make compliance the only feasible strategy.