# State Design Matters: How Representations Shape Dynamic Reasoning in Large Language Models

arXiv: https://arxiv.org/abs/2602.15858 · HTML: https://mlsanity.com/paper/2602.15858/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Reasoning benchmarks and evaluation, one of 17 directions in LLM reasoning.
- Builds on 36 of its 40 references that are in the map.
- First posted on arXiv 25 Jan 2026.

## Placed in

- LLM reasoning / [Reasoning benchmarks and evaluation](https://mlsanity.com/lr/reasoning-benchmarks-and-evaluation/)

## Builds on (most cited first, 30 of 36)

- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [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)
- [Visual Instruction Tuning](https://mlsanity.com/paper/2304.08485/) (2023)
- [Self-Consistency Improves Chain of Thought Reasoning in Language Models](https://mlsanity.com/paper/2203.11171/) (2022)
- [PaLM: Scaling Language Modeling with Pathways](https://mlsanity.com/paper/2204.02311/) (2022)
- [Reflexion: Language Agents with Verbal Reinforcement Learning](https://mlsanity.com/paper/2303.11366/) (2023)
- [Lost in the Middle: How Language Models Use Long Contexts](https://mlsanity.com/paper/2307.03172/) (2023)
- [Self-Refine: Iterative Refinement with Self-Feedback](https://mlsanity.com/paper/2303.17651/) (2023)
- [Emergent Abilities of Large Language Models](https://mlsanity.com/paper/2206.07682/) (2022)
- [Qwen2 Technical Report](https://mlsanity.com/paper/2407.10671/) (2024)
- [MMMU: A Massive Multi-discipline Multimodal Understanding and Reasoning Benchmark for Expert AGI](https://mlsanity.com/paper/2311.16502/) (2023)
- [MathVista: Evaluating Mathematical Reasoning of Foundation Models in Visual Contexts](https://mlsanity.com/paper/2310.02255/) (2023)
- [ChartQA: A Benchmark for Question Answering about Charts with Visual and Logical Reasoning](https://mlsanity.com/paper/2203.10244/) (2022)
- [Program of Thoughts Prompting: Disentangling Computation from Reasoning for Numerical Reasoning Tasks](https://mlsanity.com/paper/2211.12588/) (2022)
- [A Generalist Agent](https://mlsanity.com/paper/2205.06175/) (2022)
- [SpatialVLM: Endowing Vision-Language Models with Spatial Reasoning Capabilities](https://mlsanity.com/paper/2401.12168/) (2024)
- [PAL: Program-aided Language Models](https://mlsanity.com/paper/2211.10435/) (2022)
- [Logic-LM: Empowering Large Language Models with Symbolic Solvers for Faithful Logical Reasoning](https://mlsanity.com/paper/2305.12295/) (2023)
- [Visual CoT: Advancing Multi-Modal Language Models with a Comprehensive Dataset and Benchmark for Chain-of-Thought Reasoning](https://mlsanity.com/paper/2403.16999/) (2024)
- [Grounding Large Language Models in Interactive Environments with Online Reinforcement Learning](https://mlsanity.com/paper/2302.02662/) (2023)
- [Compressing Context to Enhance Inference Efficiency of Large Language Models](https://mlsanity.com/paper/2310.06201/) (2023)
- [BALROG: Benchmarking Agentic LLM and VLM Reasoning On Games](https://mlsanity.com/paper/2411.13543/) (2024)
- [Multi-Step Reasoning with Large Language Models, a Survey](https://mlsanity.com/paper/2407.11511/) (2024)
- [State Representation Learning for Control: An Overview](https://mlsanity.com/paper/1802.04181/) (2018)
- [SmartPlay: A Benchmark for LLMs as Intelligent Agents](https://mlsanity.com/paper/2310.01557/) (2023)
- [Agentic Large Language Models, a survey](https://mlsanity.com/paper/2503.23037/) (2025)
- [Why Is Spatial Reasoning Hard for VLMs? An Attention Mechanism Perspective on Focus Areas](https://mlsanity.com/paper/2503.01773/) (2025)
- [Towards Long-Horizon Vision-Language Navigation: Platform, Benchmark and Method](https://mlsanity.com/paper/2412.09082/) (2024)
- [Mind's Eye of LLMs: Visualization-of-Thought Elicits Spatial Reasoning in Large Language Models](https://mlsanity.com/paper/2404.03622/) (2024)

## Abstract (arXiv)

As large language models (LLMs) move from static reasoning tasks toward dynamic environments, their success depends on the ability to navigate and respond to an environment that changes as they interact at inference time. An underexplored factor in these settings is the representation of the state. Holding model parameters fixed, we systematically vary three key aspects: (1) state granularity (long form versus summary), (2) structure (natural language versus symbolic), and (3) spatial grounding (text-only versus images or textual map encodings) across sequential decision-making benchmarks. We find that trajectory summarisation improves performance by reducing noise and stabilising long-horizon reasoning. Second, natural language representations are the most robust across models, whereas structured encodings help mainly for models with strong code or structured output priors, such as JSON schemas. Third, while image-inputs show some benefit, text-based spatial encodings prove most effective. This advantage stems not from the spatial information itself, but from the act of construction, which compels the model to perform the spatial reasoning that static input does not elicit. Overall, we demonstrate that design choices for representing state are a decisive factor in performance, distinct from the availability of information itself. We note, however, that even with improved representations, current LLMs and VLMs remain brittle over long horizons, particularly when they must synthesise information to manage multiple subtasks to reach a goal.