When Agency Breaks - Coherence Constraints on Rational Action

Standard models of strategy assume that agents act to maximize well-defined objectives. But what happens when agency itself becomes unstable—when the agent cannot sustain a coherent identity long enough to choose? We show that such breakdowns are not anomalies. They are structural signatures of constrained agency under internal contradiction. Drawing on behavioral decision theory and strategic logic, we develop a new class of models in which agents act only when internal coherence is preserved. When coherence fails, strategy becomes unavailable—leading to dropout, cycling, delay, or identity reconfiguration. We introduce Strategic Identity Equilibrium (SIE), a formal extension of classical equilibrium theory that treats coherence as a dynamic constraint on action. Simulations demonstrate novel agent behaviors—dropout, oscillation, innovation, cascade collapse—that emerge naturally under structural stress. These results generalize core insights from behavioral decision science into a formal modeling framework, offering a unified foundation for constrained agency across game theory, psychology, and AI ethics.