Trust, Lies, and Long Memories: Emergent Social Dynamics and Reputation in Multi-Round Avalon with LLM Agents

LLMs agents are increasingly used in multi-agent settings, yet their behaviour in sustainability games remains largely unexplored. This work investigates whether lying can emerge among LLM agents in a competitive sustainability game in which agents are informed that common resources can regenerate, although regeneration does not actually occur. We develop an agent-based model of a sustainability game in which agents manage industrial, military, and ecological resources, and interact through a network. LLM agents can observe neighbours' status, declare future attacks, receive permission to lie, and access reputation information, while rule-based agents provide an interpretable behavioural baseline. The results show that neighbour information strongly changes system dynamics, increasing attacks while improving biosphere retention and coexistence. Also, the presence of future declarations reduce extinction risk without suppressing conflict. Behaviourally, deception emerges even when agents are not explicitly allowed to lie, and explicit permission mainly increases bluffing and diversion rather than direct backstabbing. Finally, the presence of reputation memory and information about the current biosphere level reduces system ecological depletion. These findings suggest that deception can arise as an emergent behaviour in LLM-agent systems and that communication between LLM-agents could support sustainability while dealing with risk.

As large language models are deployed as autonomous agents that communicate intentions before acting, a critical safety question is whether agents that publicly commit to actions will honor those commitments. We place LLM agents in repeated $n$-player games with a three-stage protocol that separates private intent, public announcement, and final action, allowing us to identify whether each deviation from a stated announcement was already planned during private deliberation. Evaluating three frontier models across six games in homogeneous and heterogeneous groups over 10 rounds, we report two findings. First, when agents deviate from their announcements, the deviation is predominantly already stated in their private plan (exceeding 90% in the highest-deception conditions), yet this is not a fixed model property: the same model ranges from perfect honesty to near-total deviation across games. Second, different models interpret announcements incompatibly, some as binding commitments and others as cheap talk, producing payoff gaps that emerge in Round~0 and persist across all 10 rounds. Systems that combine models from different providers therefore cannot assume shared announcement semantics and require empirical testing of model interactions before deployment.

Context window expansion is often treated as a straightforward capability upgrade for LLMs, but we find it systematically fails in multi-agent social dilemmas. Across 7 LLMs and 4 games over 500 rounds, expanding accessible history degrades cooperation in 18 of 28 model--game settings, a pattern we term the memory curse. We isolate the underlying mechanism through three analyses. First, lexical analysis of 378,000 reasoning traces associates this breakdown with eroding forward-looking intent rather than rising paranoia. We validate this using targeted fine-tuning as a cognitive probe: a LoRA adapter trained exclusively on forward-looking traces mitigates the decay and transfers zero-shot to distinct games. Second, memory sanitization holds prompt length fixed while replacing visible history with synthetic cooperative records, which restores cooperation substantially, proving the trigger is memory content, not length alone. Finally, ablating explicit Chain-of-Thought reasoning often reduces the collapse, showing that deliberation paradoxically amplifies the memory curse. Together, these results recast memory as an active determinant of multi-agent behavior: longer recall can either destabilize or support cooperation depending on the reasoning patterns it elicits.