# TurnCost: Turns, Not Observations: Cache-Aware Loop Engineering for Coding Agents

arXiv: https://arxiv.org/abs/2610.15093 · HTML: https://mlsanity.com/paper/2610.15093/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Software engineering coding agents, one of 16 directions in LLM agents and tool use.
- Builds on 14 of its 30 references that are in the map.
- First posted on arXiv 10 Oct 2026.

## Placed in

- LLM agents and tool use / [Software engineering coding agents](https://mlsanity.com/agents/software-engineering-coding-agents/)

## Builds on (most cited first, 14 of 14)

- [SGLang: Efficient Execution of Structured Language Model Programs](https://mlsanity.com/paper/2312.07104/) (2023)
- [FrugalGPT: How to Use Large Language Models While Reducing Cost and Improving Performance](https://mlsanity.com/paper/2305.05176/) (2023)
- [Hybrid LLM: Cost-Efficient and Quality-Aware Query Routing](https://mlsanity.com/paper/2404.14618/) (2024)
- [Reducing Cost of LLM Agents with Trajectory Reduction](https://mlsanity.com/paper/2509.23586/) (2025)
- [Optimizing Model Selection for Compound AI Systems](https://mlsanity.com/paper/2502.14815/) (2025)
- [Difficulty-Aware Agentic Orchestration for Query-Specific Multi-Agent Workflows](https://mlsanity.com/paper/2509.11079/) (2025)
- [Adaptive LLM Routing under Budget Constraints](https://mlsanity.com/paper/2508.21141/) (2025)
- [Doing More with Less: A Survey on Routing Strategies for Resource Optimisation in Large Language Model-Based Systems](https://mlsanity.com/paper/2502.00409/) (2025)
- [SWE-Router: Routing in Multi-turn Agentic Software Engineering Tasks](https://mlsanity.com/paper/2607.00053/) (2026)
- [Budget-Aware Agentic Routing via Boundary-Guided Training](https://mlsanity.com/paper/2602.21227/) (2026)
- [MTRouter: Cost-Aware Multi-Turn LLM Routing with History-Model Joint Embeddings](https://mlsanity.com/paper/2604.23530/) (2026)
- [Open-SWE-Traces: Advancing Dual-Mode Multilingual Distillation for Software Engineering Agents](https://mlsanity.com/paper/2606.16038/) (2026)
- [Uno-Orchestra: Parsimonious Agent Routing via Selective Delegation](https://mlsanity.com/paper/2605.05007/) (2026)
- [AgentRouter: Heterogeneous Model Routing for Cost-Optimal Multi-Step Agentic Workflows](https://mlsanity.com/paper/2609.22951/) (2026)

## Abstract (arXiv)

AI coding agents operate in iterative loops: they modify code, run tools, inspect the results, and decide what to do next. We call the design of this process loop engineering, which includes context management, model selection, compaction, and termination. Existing efficiency work mainly compresses tool observations or routes selected turns to cheaper models, but the practical opportunity for these optimizations remains unclear. We analyze 600 publicly released coding-agent trajectories spanning two agent scaffolds and two language models. Median observations contain only 118-286 tokens, while the large build logs commonly used to motivate compression occur near the ninety-ninth percentile. Moreover, 98.6% of input tokens are served from a prefix cache, so flat input pricing overestimates loop cost by roughly 7x on average under near-ideal caching. We derive and empirically validate a closed-form break-even condition for model delegation. Delegation increases cost in half of the evaluated settings, near the predicted boundary. More broadly, turn count explains 84% of the variance in log trajectory cost, compared with 4% for mean observation size; the most expensive trajectories have the most turns despite having the smallest observations. These associations suggest that observation-focused methods target a secondary cost factor, and identify unnecessary turns as the larger and largely unexamined opportunity, though we do not establish that turns can be removed while holding task success fixed. We release TurnCost, a tool for re-scoring trajectory corpora under alternative caching, pricing, compression, and routing policies.