Navigating the Stormy Waters of Regulation: An Agent‐Based Modeling and Decision‐Support Framework for Groundwater Compliance and Enforcement

Abstract Water resources sustainability hinges upon an efficient and effective regulatory compliance and enforcement strategy that steers the collective actions of interdependent stakeholders. Achieving this goal is particularly challenging for groundwater due to its hidden nature, significant knowledge gaps about its state, its status as a common‐pool resource, the value‐laden nature of compliance, and historically under‐resourced enforcement efforts. To address these challenges, this article introduces BEACON, a framework grounded in theories and empirical findings from regulatory compliance and enforcement research, to conceptualize farmers' compliance behaviors with existing groundwater allocation rules within the New South Wales regulatory context. Building on this foundation, we then present an ABM and apply it through a GSA to unravel the dynamics of compliance, enforcement, and deterrence of groundwater allocations. Findings reveal how increasing investments in surveillance trigger a consistent, nonlinear response in regulatory compliance and illegal water take. On the whole, BEACON and its implementation via the ABM stand as Regulatory Technology tools, aiming to provide new insights into the often assumed links between well‐crafted regulations and their outcomes and, in doing so, pave the way for innovative approaches in regulatory policy design and implementation for groundwater sustainability.