Hallucination as Commitment Failure: Larger LLMs Misfire Despite Knowing the Answer

Large language models can hallucinate even when the knowledge required for a correct answer is already available. We study this failure through a latent-key view of inference, where answer selection depends on competition among associations acquired during pretraining. We show that model predictions can be highly sensitive to individual query keywords, that these influential keywords exhibit entity-specific binding, and that their effects are systematically shaped by pretraining frequency. Multiple bindings can also compete and exhibit higher-order interactions within the same query. Based on this mechanism, we introduce a two-stage keyword-perturbation method for hallucination detection. By removing influential keywords and measuring how the model reorganizes its prediction, the method distinguishes errors caused by misleading key associations from correct decisions supported by diagnostic evidence. Across multiple models and benchmarks, perturbation provides a strong and transferable detection signal, reaching $.910$ AUROC on probe-known ScientistQA. Finally, we extend the same probabilistic framework to four hallucination regimes: knowledge deficit, wrong knowledge, context distraction, and unstable inference. Their operational distributions across benchmarks provide diagnostic context for why different detector families succeed in different settings.

Large language models often produce hallucinated answers that violate prompt-level constraints. A key diagnostic question is whether these failures reflect missing knowledge, or whether the model has the relevant information but follows the wrong inference path. We study this phenomenon as inference misalignment: a mismatch between the answer supported by the prompt and the answer favored by statistically salient latent associations. We formalize this view with a latent key-task model, in which pretraining-frequency imbalance can cause a shortcut path to dominate the constraint-sensitive path and induce positive inference loss. The framework predicts two failure modes: task-retrieval bias in entity disambiguation and key-selection bias in action choice. We introduce TrapQA, a controlled diagnostic testbed with two components. ScientistQA tests disambiguation among similar scientists with supplementary factual probes, while Real-Life Constrained QA tests everyday constraint following under salient shortcuts. Our results show that hallucination can arise from biased latent inference rather than absent knowledge alone.

As large language models (LLMs) evolve from conversational assistants into agents capable of handling complex tasks, they are increasingly deployed in high-risk domains. However, existing benchmarks largely rely on mixed queries and posterior evaluation, output-level scoring, which quantifies hallucination severity but offers limited insight into where and why hallucinations arise in the generation pipeline. We therefore reformulate hallucination evaluation as a diagnostic problem and propose PRISM, a controlled benchmark that disentangles hallucinations into four dimensions: knowledge missing, knowledge errors, reasoning errors, and instruction-following errors, grounded in three stages of generation (memory, instruction, and reasoning). PRISM contains 9,448 instances across 65 tasks and supports fine-grained, stage-aware diagnostic evaluation. Evaluating 24 mainstream open-source and proprietary LLMs, we uncover consistent trade-offs across instruction following, memory retrieval, and logical reasoning, showing that mitigation strategies often improve specific dimensions at the expense of others. We hope PRISM provides a framework for understanding the specific mechanisms behind LLMs hallucinations, ultimately accelerating the development of trustworthy large language models.