# Faithful yet Collusive: Why Chain-of-Thought Monitoring Cannot Detect Collusion in LLM Pricing Agents under Oligopolistic Competition

arXiv: https://arxiv.org/abs/2609.18346 · HTML: https://mlsanity.com/paper/2609.18346/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Reasoning for agents, planning and code, one of 17 directions in LLM reasoning.
- Builds on 4 of its 44 references that are in the map.
- First posted on arXiv 16 Sep 2026.

## Placed in

- LLM reasoning / [Reasoning for agents, planning and code](https://mlsanity.com/lr/reasoning-for-agents-planning-and-code/)
- LLM agents and tool use / [Financial trading and forecasting agents](https://mlsanity.com/agents/financial-trading-and-forecasting-agents/)

## Builds on (most cited first, 4 of 4)

- [Measuring Faithfulness in Chain-of-Thought Reasoning](https://mlsanity.com/paper/2307.13702/) (2023)
- [Reasoning Models Don't Always Say What They Think](https://mlsanity.com/paper/2505.05410/) (2025)
- [Algorithmic Collusion by Large Language Models](https://mlsanity.com/paper/2404.00806/) (2024)
- [Strategic Collusion of LLM Agents: Market Division in Multi-Commodity Competitions](https://mlsanity.com/paper/2410.00031/) (2024)

## Abstract (arXiv)

Large language models (LLM) deployed as autonomous pricing agents may sustain supracompetitive prices through tacit coordination. We develop a causal graph divergence framework that separately measures structural faithfulness and intent faithfulness of LLM pricing agents in Bertrand competition. Across nine LLMs under duopoly and triopoly conditions, collusive behavior and chain-of-thought (CoT) faithfulness dissociate along both dimensions: the most collusive model accurately reports cooperative intent yet reasons structurally unfaithfully, while the most structurally faithful model sustains supra-Nash pricing under both market structures. These findings establish that CoT monitoring alone cannot serve as a standalone safeguard against algorithmic collusion.