cs.LGMay 11, 2026

The Scaling Law of Evaluation Failure: Why Simple Averaging Collapses Under Data Sparsity and Item Difficulty Gaps, and How Item Response Theory Recovers Ground Truth Across Domains

Authors: Jung Min Kang

Organizations: Independent Researcher · Seoul, South Korea

Abstract

Benchmark evaluation across AI and safety-critical domains overwhelmingly relies on simple averaging. We demonstrate that this practice produces substantially misleading rankings when two conditions co-occur: (1) the evaluation matrix is sparse and (2) items vary substantially in difficulty. Through controlled simulation experiments across four domains -- NLP (GLUE), clinical drug trials, autonomous vehicle safety, and cybersecurity -- we show that Spearman rank correlation ρρ between simple-average rankings and ground-truth rankings degrades from ρ=1.000ρ= 1.000 at 100% coverage to ρ=0.809ρ= 0.809 at 67% coverage with high difficulty heterogeneity (mean over 20 seeds). A standard two-parameter logistic (2PL) Item Response Theory (IRT) model maintains ρ0.996ρ\geq 0.996 across all conditions. A 150-condition grid sweep over sparsity S[0,0.70]S \in [0, 0.70] and difficulty gap D[0.5,5.0]D \in [0.5, 5.0] confirms that ranking error forms a failure surface with a strong S×DS \times D interaction (γ3=+0.20γ_3 = +0.20, t=13.05t = 13.05), while IRT maintains ρ0.993ρ\geq 0.993 throughout. We discuss implications for Physical AI benchmarking, where evaluation matrices are often incomplete and difficulty gaps are extreme.

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