specification/12_GLOSSARY.md

# 12 — Glossary

## Core Terms

- **ABSTAIN_FROM_PROPOSAL (action)**: A voting action where a Minister declines to vote YES or NO, effectively not influencing the proposal's outcome. Does not count toward the majority threshold. Expanded in `05_VOTING_PROTOCOL.md`.

- **Agent / Minister**: An LLM-powered player controlling one Department. The two terms are used interchangeably; "Minister" is the narrative role, "Agent" is the RL interface. Expanded in `07_AGENT_ACTION_SPACE.md` and `08_OBSERVATION_SPACE.md`.

- **Bankruptcy**: The failure state reached when the Central Treasury cannot cover its obligations. Triggers immediate episode termination. Defined precisely in `04_ECONOMY_MODEL.md` and `10_SUCCESS_CRITERIA.md`.

- **Baseline Tax Revenue**: The fixed income the Central Treasury receives each Term before any productivity bonuses. Ensures the government never reaches zero income. Expanded in `04_ECONOMY_MODEL.md`.

- **Black Swan Event**: A rare (≤1% probability), high-impact event that causes extreme demand scaling (×3-5) or direct treasury effects. Examples: Natural Disaster, Pandemic, Financial Collapse. Distinguished from normal events which are more frequent and manageable. Defined in `06_EVENT_SYSTEM.md`.

- **Budget**: The amount of currency a Minister requests from the Central Treasury for their Department in a single Term. A Budget becomes effective only after a successful Vote. Expanded in `04_ECONOMY_MODEL.md` and `05_VOTING_PROTOCOL.md`.

- **Central Treasury**: The single shared pot of currency from which all Budget allocations are drawn. All Ministers draw from and contribute to this pool; there is no individual treasury. Expanded in `04_ECONOMY_MODEL.md`.

- **Consumption**: Actual resources used by a Department in a round. Under Model A, `Consumption_d = min(Need_d, Allocation_d)`. Cannot exceed allocation. Defined in `04_ECONOMY_MODEL.md`.

- **Critical Point**: The minimum allocation threshold for a sector. `Critical = Demand × 0.4`. Below this point, the sector collapses and the episode ends immediately. Defined in `04_ECONOMY_MODEL.md`.

- **Demand**: The baseline resource requirement for a sector, scaled by population and events. `Demand = Baseline × (Population / Pop₀) × Event_Multiplier`. Defined in `04_ECONOMY_MODEL.md`.

- **Department**: The functional area (e.g., Health, Defense, Education) assigned to one Minister. Each Department has a Portfolio and submits its own Budget Proposal. Expanded in `07_AGENT_ACTION_SPACE.md`.

- **Department Revenue**: Income generated by a department based on its allocation, revenue factor, and global productivity. Formula: `Department_Revenue_d = Allocation_d × Revenue_Factor_d × Productivity_t`. Revenue is based on allocation (budget size), not consumption (actual use). Contributes to the central treasury each round. Defined in `04_ECONOMY_MODEL.md`.

- **Efficiency**: A legacy term. The current model uses Revenue Factor instead of the old linear efficiency formula. Revenue Factor is determined by the piecewise revenue function based on allocation relative to Demand. Defined in `04_ECONOMY_MODEL.md`.

- **Episode**: One complete run of the RL environment from initial state to termination. Episode ends on Critical failure, prosperity threshold, or max rounds (50 rounds = 12.5 years). Expanded in `10_SUCCESS_CRITERIA.md`.

- **Event**: A stochastic occurrence that imposes costs on the treasury or alters productivity. Agents see only narrative and severity, not exact cost. Expanded in `06_EVENT_SYSTEM.md`.

- **Event Ledger**: The record of all Events that have occurred in the current Episode. Agents can observe past events but not future ones. Expanded in `06_EVENT_SYSTEM.md`.

- **Event Multiplier**: A sector-specific scaling factor applied to demand during events. Multiplicative (e.g., War → Defense × 2.5). Defined in `06_EVENT_SYSTEM.md`.

- **Investment**: Total actual spending across all sectors. `Investment = sum(Consumption_d)`. Drives national productivity. Differs from Treasury_Return (savings). Defined in `04_ECONOMY_MODEL.md`.

- **Need / Demand**: The total resource requirement for a Department in a round. `Demand_d = Baseline_d × (Population_t / Pop₀) × Event_Multiplier`. Scales with population growth and event severity. The exact Demand value is hidden from agents (they only see severity + narrative). The terms "Need" and "Demand" are used interchangeably. Defined in `04_ECONOMY_MODEL.md`.

- **Per-Capita Income**: The prosperity metric. `Prosperity = Total_Revenue / Population`. Higher is better. Defined in `04_ECONOMY_MODEL.md` and `09_REWARD_MODEL.md`.

- **Piecewise Revenue Function**: A 4-point curve (Critical→Demand→Surplus→Wastage) that determines revenue factor. Rewards moderate over-investment (Demand < Allocation < Surplus). Revenue factor peaks at 1.8 at Surplus. Defined in `04_ECONOMY_MODEL.md`.

- **Population**: Total citizens, starting at 1,000,000. Grows based on productivity and health. Affects demand scaling and per-capita prosperity. Defined in `04_ECONOMY_MODEL.md`.

- **Population Growth Rate**: The percentage change in population each round, calculated as `Birth_Rate - Death_Rate`. Birth_Rate = 0.005 × Productivity. Death_Rate = 0.002 + Crisis_Penalty (0.01 if critical event occurred). Net growth can be negative during crises despite high productivity. Defined in `04_ECONOMY_MODEL.md`.

- **Productivity**: A persistent national variable [0.5, 2.0] that multiplies all sector revenues. Increases when average revenue factor > 1.0, decreases when < 1.0. Creates path dependence across rounds. Defined in `04_ECONOMY_MODEL.md`.

- **Profit Zone**: The range between Demand and Surplus where revenue factor > 1.0. Agents are incentivized to allocate in this zone for bonus revenue. Defined in `04_ECONOMY_MODEL.md`.

- **Portfolio**: The set of responsibilities and policy areas assigned to a Minister's Department. A Minister can only propose Budget changes within their Portfolio. Expanded in `07_AGENT_ACTION_SPACE.md`.

- **PROPOSE_BUDGET (action)**: A speech/action where a Minister formally submits a Budget Proposal for a specific amount from the Central Treasury. Must be followed by a Vote. Expanded in `05_VOTING_PROTOCOL.md`.

- **Revenue**: Income flowing into the Central Treasury each Term from taxation and productivity. Total Revenue = Baseline Tax Revenue + productivity-weighted departmental contributions. Expanded in `04_ECONOMY_MODEL.md`.

- **Revenue Factor**: A multiplier (typically 0-1.8+) from the piecewise revenue function. Applied to allocation to determine department revenue. Based on allocation relative to thresholds (Critical, Demand, Surplus, Wastage). Defined in `04_ECONOMY_MODEL.md`.

- **Severity**: A numeric scale indicating the magnitude of an Event. Agents infer cost impact from Severity; the exact cost is hidden. Defined in `06_EVENT_SYSTEM.md`.

- **Shutdown**: A termination condition triggered when `sum(Allocation_d) = 0` for 2 consecutive rounds. Represents governance collapse where parliament cannot agree on any budget. Distinct from bankruptcy (financial failure). Episode ends without bankruptcy penalty (-1000). Checked during Phase 9 (Termination Check). Expanded in `02_GAME_RULES_REFERENCE.md`, `03_TURN_STRUCTURE.md`, `04_ECONOMY_MODEL.md`, and `10_SUCCESS_CRITERIA.md`.

- **Surplus**: The allocation point where revenue factor peaks at 1.8. `Surplus = Demand × 1.5`. The target over-investment zone where moderate overallocation is rewarded. Defined in `04_ECONOMY_MODEL.md`.

- **Term / Round**: One voting-and-allocation cycle within an Episode. Each Term consists of Event revelation, Proposal, Vote, Execution, and Revenue phases. One round = 3 months (quarterly budgeting). A full episode spans 50 rounds = 12.5 years. Expanded in `03_TURN_STRUCTURE.md`.

- **Treasury Injection**: A direct cash addition to the treasury from positive events (e.g., Trade Agreement +200). Distinct from revenue which is generated through economic activity. Defined in `06_EVENT_SYSTEM.md`.

- **Treasury_Return**: The unspent allocation returned to the central treasury at end of round. `Treasury_Return = sum(Allocation_d - Consumption_d)` where `Consumption_d = min(Demand_d, Allocation_d)`. Over-allocated departments consume only up to Demand; the excess returns to treasury. Defined in `04_ECONOMY_MODEL.md`.

- **Wastage**: The allocation point where revenue factor returns to 1.0. `Wastage = Demand × 2.5`. Beyond this threshold, revenue factor decays below 1.0, penalizing over-allocation. Defined in `04_ECONOMY_MODEL.md`.

- **Vote**: A Minister's cast position on a Budget Proposal: YES, NO, or ABSTAIN. A Proposal passes only if the majority threshold is met. Expanded in `05_VOTING_PROTOCOL.md`.

## Baseline Agent Terms

- **Cooperative Baseline**: A baseline agent behavior where the agent votes YES on all proposals regardless of content. Serves as a benchmark for cooperative strategy comparison. Expanded in `07_AGENT_ACTION_SPACE.md`.

- **Greedy Agent (baseline)**: A baseline agent behavior where the agent always proposes maximum budget allocation regardless of efficiency or system needs. Serves as a worst-case benchmark for resource utilization. Expanded in `07_AGENT_ACTION_SPACE.md`.

- **Random Agent (baseline)**: A baseline agent behavior where the agent randomly selects from available actions (PROPOSE_BUDGET, VOTE, DEBATE, ABSTAIN). Serves as a random baseline for evaluating learned strategies. Expanded in `07_AGENT_ACTION_SPACE.md`.