The Oursler Automaton Equation

Inspired by Jaquet-Droz's Writer (c. 1770)

Around 1770, the watchmaker Pierre Jaquet-Droz built a mechanical boy that writes. A small set of fixed cams, a wheel that picks which cams run, and a pen that lifts or touches the paper let it write any text it was set to. We turned that machine into a way of testing decision systems. It asks one question first: do the rules let only valid answers through?

Three parts of every decision system

What it does

The Oursler Automaton Equation scores a set of decision rules on how clearly and consistently they answer. It shows how often the rules give one clear, agreed answer, how many real cases they actually cover, whether answers hold steady when an input moves slightly, and whether the rules combine independent signals or just sort on one number. It also points to the change that would improve the rules most. The result is a plain report of where a decision system is solid and exactly where it isn't.

First test: the Covenant Desk

We applied it to commercial-loan compliance certificates: EBITDA, total leverage, interest coverage, DSCR and minimum liquidity. Starting from the rules exposed a flaw the original design missed.

An internal test by Recombination Finance, not an independent validation.

Where it runs

• Rule Audit. Paste a credit policy or covenant test. The audit runs thousands of cases through it and reports gaps, conflicts, dead rules and brittle cutoffs, with a file you can keep for SR 11-7 model-risk validation.
• V8 CFD engine. Every locked pick now carries a scorecard showing whether the pick is decisive or a close call. It is advisory and never changes V8's pick.
• Nexus finance tool. The V8 engine behind it keeps its 20/20 validation record; this is a way to check rule sets, not a change to the engine.