# Feedback-Induced Performance Decline in LLM-Based Decision-Making

arXiv: https://arxiv.org/abs/2507.14906 · HTML: https://mlsanity.com/paper/2507.14906/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- Builds on 20 of its 31 references that are in the map.
- First posted on arXiv 20 Jul 2025.

## Builds on (most cited first, 20 of 20)

- [Proximal Policy Optimization Algorithms](https://mlsanity.com/paper/1707.06347/) (2017)
- [The Llama 3 Herd of Models](https://mlsanity.com/paper/2407.21783/) (2024)
- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [Language Models as Zero-Shot Planners: Extracting Actionable Knowledge for Embodied Agents](https://mlsanity.com/paper/2201.07207/) (2022)
- [DSPy: Compiling Declarative Language Model Calls into Self-Improving Pipelines](https://mlsanity.com/paper/2310.03714/) (2023)
- [PlanBench: An Extensible Benchmark for Evaluating Large Language Models on Planning and Reasoning about Change](https://mlsanity.com/paper/2206.10498/) (2022)
- [Minigrid & Miniworld: Modular & Customizable Reinforcement Learning Environments for Goal-Oriented Tasks](https://mlsanity.com/paper/2306.13831/) (2023)
- [On the Planning Abilities of Large Language Models : A Critical Investigation](https://mlsanity.com/paper/2305.15771/) (2023)
- [The Illusion of Thinking: Understanding the Strengths and Limitations of Reasoning Models via the Lens of Problem Complexity](https://mlsanity.com/paper/2506.06941/) (2025)
- [TextGrad: Automatic "Differentiation" via Text](https://mlsanity.com/paper/2406.07496/) (2024)
- [Leveraging Pre-trained Large Language Models to Construct and Utilize World Models for Model-based Task Planning](https://mlsanity.com/paper/2305.14909/) (2023)
- [On the Self-Verification Limitations of Large Language Models on Reasoning and Planning Tasks](https://mlsanity.com/paper/2402.08115/) (2024)
- [Position: Stop Anthropomorphizing Intermediate Tokens as Reasoning/Thinking Traces!](https://mlsanity.com/paper/2504.09762/) (2025)
- [Mastering Board Games by External and Internal Planning with Language Models](https://mlsanity.com/paper/2412.12119/) (2024)
- [MBA-RAG: a Bandit Approach for Adaptive Retrieval-Augmented Generation through Question Complexity](https://mlsanity.com/paper/2412.01572/) (2024)
- [To the Globe (TTG): Towards Language-Driven Guaranteed Travel Planning](https://mlsanity.com/paper/2410.16456/) (2024)
- [LLM Augmented Hierarchical Agents](https://mlsanity.com/paper/2311.05596/) (2023)

## Built on by (most cited first, 1 of 1)

- [Why We Need World Models for AGI: Where LLMs Fail and How World Models May Outperform](https://mlsanity.com/paper/2605.23972/) (2026)

## Abstract (arXiv)

The ability of Large Language Models (LLMs) to extract context from natural language problem descriptions naturally raises questions about their suitability in autonomous decision-making settings. This paper studies the behaviour of these models within a Markov Decision Process (MDPs). While traditional reinforcement learning (RL) strategies commonly employed in this setting rely on iterative exploration, LLMs, pre-trained on diverse datasets, offer the capability to leverage prior knowledge for faster adaptation. We investigate online structured prompting strategies in sequential decision making tasks, comparing the zero-shot performance of LLM-based approaches to that of classical RL methods. Our findings reveal that although LLMs demonstrate improved initial performance in simpler environments, they struggle with planning and reasoning in complex scenarios without fine-tuning or additional guidance. Our results show that feedback mechanisms, intended to improve decision-making, often introduce confusion, leading to diminished performance in intricate environments. These insights underscore the need for further exploration into hybrid strategies, fine-tuning, and advanced memory integration to enhance LLM-based decision-making capabilities.