# How do World Models and Policies Compose in LLM Agents? A Joint Spectral and Behavioral Account

arXiv: https://arxiv.org/abs/2608.30067 · HTML: https://mlsanity.com/paper/2608.30067/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in World models for language agents, one of 11 directions in World models.
- Builds on 13 of its 46 references that are in the map.
- First posted on arXiv 30 Aug 2026.

## Placed in

- World models / [World models for language agents](https://mlsanity.com/wm/world-models-for-language-agents/)
- LLM agents and tool use / [General LLM agent frameworks and benchmarks](https://mlsanity.com/agents/general-llm-agent-frameworks-and-benchmarks/)

## Builds on (most cited first, 13 of 13)

- [DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Models](https://mlsanity.com/paper/2402.03300/) (2024)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [Evaluating Large Language Models Trained on Code](https://mlsanity.com/paper/2107.03374/) (2021)
- [Qwen2.5 Technical Report](https://mlsanity.com/paper/2412.15115/) (2024)
- [Locating and Editing Factual Associations in GPT](https://mlsanity.com/paper/2202.05262/) (2022)
- [Representation Engineering: A Top-Down Approach to AI Transparency](https://mlsanity.com/paper/2310.01405/) (2023)
- [Qwen3 Embedding: Advancing Text Embedding and Reranking Through Foundation Models](https://mlsanity.com/paper/2506.05176/) (2025)
- [Mastering Diverse Domains through World Models](https://mlsanity.com/paper/2301.04104/) (2023)
- [Why Do LLM Agents Fail in Exploring New Environments? A World-Modeling Perspective](https://mlsanity.com/paper/2510.15047/) (2025)
- [Reinforcement World Model Learning for LLM-based Agents](https://mlsanity.com/paper/2602.05842/) (2026)
- [ECHO: Terminal Agents Learn World Models for Free](https://mlsanity.com/paper/2605.24517/) (2026)
- [Dyna-Think: Synergizing Reasoning, Acting, and World Model Simulation in AI Agents](https://mlsanity.com/paper/2506.00320/) (2025)
- [Dyna-Mind: Learning to Simulate from Experience for Better AI Agents](https://mlsanity.com/paper/2510.09577/) (2025)

## Abstract (arXiv)

How do LLM agents come to both understand environments they act in and master tasks set within them? Through controlled experiments combining world-model training (next-state prediction) and policy training (reward maximization), we investigate this question. We dissect the resulting models through their additive parameter updates. Geometrically, we find effective world-model updates are low-rank and share an input-feature subspace with policy updates while writing to nearly orthogonal output directions, whether trained separately or sequentially. However, we find that, in projection interventions, the sequential update induces more robustness than separate policy RL when removing the world model's leading input directions, suggesting that it has learned alternative input pathways. Behaviorally, we find the sequentially trained agent explores a wider range of states and actions. Based on this, we ask: does policy training preserve world knowledge as well as it could? We probe this with training-free merging built on the geometrically motivated input basis plus an online world-model loss during policy RL, and show both improve over the untreated baseline. Our findings suggest world knowledge and task-directed ability can be learned in geometrically complementary forms, and that future post-training pipelines should consider how best to engineer the interface between them.