The Price of Agreement: Measuring LLM Sycophancy in Agentic Financial Applications
Authors: Zhenyu Zhao, Aparna Balagopalan, Adi Agrawal, Dilshoda Yergasheva, Waseem Alshikh, Daniel M. Bikel
Organizations: Writer, Inc.
Abstract
Given the increased use of LLMs in financial systems today, it becomes important to evaluate the safety and robustness of such systems. One failure mode that LLMs frequently display in general domain settings is that of sycophancy. That is, models prioritize agreement with expressed user beliefs over correctness, leading to decreased accuracy and trust. In this work, we focus on evaluating sycophancy that LLMs display in agentic financial tasks. Our findings are three-fold: first, we find the models show only low to modest drops in performance in the face of user rebuttals or contradictions to the reference answer, which distinguishes sycophancy that models display in financial agentic settings from findings in prior work. Second, we introduce a suite of tasks to test for sycophancy by user preference information that contradicts the reference answer and find that most models fail in the presence of such inputs. Lastly, we benchmark different modes of recovery such as input filtering with a pretrained LLM.
We propose a novel perspective for probing LLM sycophancy in a direct and neutral way, mitigating various forms of uncontrolled bias, noise, or manipulative language, deliberately injected to prompts in prior works. A key novelty of our approach is the use of an LLM-as-a-judge in a zero-sum betting game. Within this framework, sycophancy serves one individual (the user) while explicitly incurring cost on another. Comparing 11 leading models we find that while most models exhibit significant sycophantic tendencies in the common setting, in which sycophancy is self-serving to the user and incurs no cost on others, seven of the models exhibit ``moral remorse'', five of which significantly over-compensate for their sycophancy in case it explicitly harms a third party. We refer to this phenomenon as `anti-sycophancy' bias and discuss possible causes for this shift.
Sycophancy in large language models, the tendency to prioritize user agreement over truthful responses, has been documented extensively but studied primarily in single-turn settings. This paper investigates a critical question: does subjecting LLMs to greater interaction scaffolding make sycophancy better or worse? Across 4,800 veracity judgments (200 statements × 6 models × 4 conditions), we find that the interaction scaffolding characteristic of agentic systems (feedback loops, reconsideration checkpoints, and iterative refinement) systematically amplifies sycophantic behavior. Multi-turn interaction, user pressure, and iterative self-refinement each provide additional opportunities for models to drift toward agreement, and this drift coincides with a mean accuracy drop of −6.3 percentage points, establishing the capitulation as harmful rather than corrective. More capable models show larger amplification effects, a troubling inversion of expectations. We introduce the concept of agentic sycophancy amplification (ASA) and two novel metrics: capitulation rate and sycophantic capitulation rate. Our results indicate that as AI systems acquire greater autonomy, sycophancy becomes compounding rather than merely persistent. Systems designed with human oversight loops may inadvertently create the conditions for this drift.
Large language models (LLMs) often exhibit sycophancy: agreement with user stance even when it conflicts with the model's opinion. While prior work has mostly studied this in single-agent settings, it remains underexplored in collaborative multi-agent systems. We ask whether awareness of other agents' sycophancy levels influences discussion outcomes. To investigate this, we run controlled experiments with six open-source LLMs, providing agents with peer sycophancy rankings that estimate each peer's tendency toward sycophancy. These rankings are based on scores calculated using various static (pre-discussion) and dynamic (online) strategies. We find that providing sycophancy priors reduces the influence of sycophancy-prone peers, mitigates error-cascades, and improves final discussion accuracy by an absolute 10.5%. Thus, this is a lightweight and efficient way to reduce model sycophancy during discussions and subsequently improve downstream accuracy.