mlsanityData to 7 Oct 2026

Belief Propagation in LLM World Models: Measuring Strategic Information Bias with Prediction Markets

arXiv 2607.20441 ↗First posted 12 May 2026cs.CL cs.LGcited by 1

On the map: World models → World models for language agents

Abstract (arXiv)

Every information ecosystem produces beliefs that shape strategic decisions. Both human analysts and AI systems inherit the blind spots of their information sources. We show that LLMs, combined with prediction markets, function as a calibrated instrument for measuring how far ecosystem-induced beliefs deviate from an external reference: LLMs extract the beliefs a text corpus implies, and prediction market price trajectories, anchored at resolution by realised outcomes, provide the calibration reference against which to quantify the deviation. We isolate the bias contribution of specific text through ablation: varying information context while holding the model fixed, with a contaminated model that knows actual outcomes as control. Applied to 111 Ukraine-related prediction markets, comprising approximately 93,000 predictions across four models, we find that English news context systematically biases territorial predictions, wrong 64 to 72 percent of the time when it pushes predictions toward territorial capture. A contaminated model that knows actual outcomes shows the same error rate, indicating that the bias originates primarily in the text. Supplementing with Ukrainian military-analytical sources reduces the bias for all clean models, while absolute-error gains are partial and model-dependent. We show that the distortion originates primarily in the sources, not the models. Consistent across four architectures, it will persist in any system that processes them and propagate into downstream decisions.

Key facts. Cited by 1 paper in the map (data through 7 Oct 2026). Placed in World models for language agents, one of 11 directions in World models. Builds on 3 of its 19 references that are in the map. First posted on arXiv 12 May 2026.

Builds on

3 of 19 references.

References · 3

  1. 2024Approaching Human-Level Forecasting with Language Modelscited by 102
  2. 2025AIA Forecaster: Technical Reportcited by 9
  3. 2026An evaluation of LLMs for political bias in Western media: Israel-Hamas and Ukraine-Russia warscited by 1

Built on by

Cited by year (2026 to 7 Oct)

Citing papers per year: 2026: 1.

1 paper.

Similar, not cited

Close in wording, no citation either way

  1. 2025The simulation of judgment in LLMs
  2. 2025Debiasing International Attitudes: LLM Agents for Simulating US-China Perception Changes
  3. 2026Why Do LLMs Struggle in Strategic Play? Broken Links Between Observations, Beliefs, and Actions
  4. 2026OptimismBench: Forecasting Bias and the Alignment Effect in Language Model Judgment
  5. 2024Anchoring Bias in Large Language Models: An Experimental Study
  6. 2025Noise, Adaptation, and Strategy: Assessing LLM Fidelity in Decision-Making
  7. 2026Building Social World Models with Large Language Models
  8. 2026TruthTensor: Evaluating LLMs through Human Imitation on Prediction Market under Drift and Holistic Reasoning