How a Cooperative-Override Circuit Suppresses Nash Play in Large Language Models

arXiv:2604.27167v3 Announce Type: replace-cross Abstract: On the named Prisoner's Dilemma under direct prompting, three larger instruction-tuned models, Llama-3-70B, Qwen2.5-32B, and Qwen2.5-72B, lock at full cooperation, the metric's maximum distance from Nash with zero variance across replicates, while Llama-3-8B plays near-Nash. Opening the models, a logit-lens analysis finds a distributed cooperative override. Intermediate readouts lean toward the Nash action through roughly three quarters of network depth before a late surge toward cooperation, and the final layer settles the contest. The size of that final correction, not the surge, rank-matches chain-of-thought behavior across scale and two architectures. In the 8B the override is a single causally controllable direction in the residual stream; steering it dials the decision, and clamping its component at one position of one layer moves the choice strictly monotonically, Spearman rho = 1.000, with generation fluent. The circuit is lexical. It survives name removal and payoff rescaling but disengages when Cooperate and Defect are replaced with neutral labels, and on 48 payoff-random games with neutral surfaces no model locks cooperative on any dilemma or shows general equilibrium competence. In mixed-model populations a single Nash-playing agent collapses cooperation contagiously. What suppresses Nash play in large language models is a word-triggered circuit rather than missing competence, and it can be measured, bounded, and controlled.