Does Theory of Mind Improvement Really Benefit Human-AI Interactions? Empirical Findings from Interactive Evaluations

Text-based evaluations of Theory of Mind (ToM) in Large Language Models (LLMs) often involve cognitive tests akin to the Sally-Anne task that can be gamed due to exposure to relevantly similar tasks in pre-training and do not obviously test models' functional ToM abilities in ways that generalize to naturalistic settings. To address these issues, we introduce the Epistemic Asymmetry Schelling Task (EAST), a two-player dialogue game designed to benchmark robust and generalizable ToM abilities. By requiring LLM-LLM dyads to independently converge on semantic Schelling points under varying states of epistemic transparency, we evaluate whether models can robustly apply ToM to achieve coordination. Our results reveal a significant capability gap in functional social reasoning, with only frontier models successfully navigating the varying epistemic demands of the tasks. Analysis of reasoning traces shows that coordination failures are primarily driven by epistemic tracking errors, such as conflating private knowledge with mutual knowledge. Despite high performance on traditional static benchmarks, our study shows that robust social reasoning and epistemic tracking remain a critical bottleneck, providing concrete targets for future LLM evaluation and development.

Theory of Mind (ToM) is essential for agent interactions, yet existing evaluations either rely on static scenarios that oversimplify mental-state reasoning or interactive settings that provide limited diagnostic insight. We present Avalon-ToM-Bench, a fine-grained benchmark that operationalizes ToM through the asymmetric-information mechanics of The Resistance: Avalon. Rather than evaluating end-to-end gameplay, it decomposes ToM into a 2$\times$2 taxonomy -- epistemic versus motivational reasoning crossed with inference versus action -- using human-crafted, perspective-constrained queries. Benchmarking 28 LLMs reveals three insights: 1) Reasoning, not knowledge. Models show strong game-rule comprehension but markedly weaker ToM abilities, isolating failures to social reasoning rather than missing domain knowledge. 2) Expression, not representation. Mechanistic analyses via linear probing and activation steering show that models frequently represent correct mental-state inferences in their hidden states but fail to express them during generation -- linear probes recover 77-82% accuracy versus 62-70% from the models' own chain-of-thought. 3) Policy, not deliberation. Dedicated reasoning training yields substantial improvements whereas test-time chain-of-thought provides only marginal gains (+11.0 versus +1.1 points on average), suggesting that robust ToM depends on a learned reasoning policy rather than increased inference-time deliberation.

Theory of Mind (ToM), the ability to infer others' knowledge, intentions, and emotions, is commonly evaluated in large language models (LLMs) using end-point question answering, where performance is judged solely by the final answer to a social reasoning query. This paradigm obscures whether the model actually constructs the underlying mental-state representations required for robust reasoning, particularly in scenarios involving divergent, evolving, or mistaken beliefs. In order to address this research gap, we introduce OmniToM, a benchmark that directly evaluates these representations by requiring explicit modeling of belief structures for all relevant actors within a narrative. These structures are composed of belief propositions: minimal statements of what an actor takes to be true about the world or another actor's mental state, allowing knowledge, intentions, emotions, and false beliefs to be analyzed in a common format. Models are evaluated in two stages: Stage 1: Belief Extraction, which extracts from the story the beliefs relevant to its social dynamics, and Stage 2: Belief Labeling, which assigns each belief a seven-dimensional schema label covering recursive order, truth status, knowledge access, explicitness, content type, mental source, and context. Built from 895 stories from the existing ToMBench story corpus and augmented with 22,343 labeled belief propositions, OmniToM uses a human-calibrated LLM-assisted annotation pipeline. Across diverse models in zero-shot evaluation, OmniToM reveals an actor-specific belief-tracking bottleneck: current LLMs struggle with the knowledge-access and representational decisions required to transform narrative facts into actors' beliefs and shared mental states.