Dissociative Identity: Language Model Agents Lack Grounding for Reputation Mechanisms

As language-model agents increasingly work in teams, each agent must decide how much to trust its teammates. Yet we lack a standard way to measure trust between AI agents. We propose a behavioral measure based on costly verification. In a cooperative survival game, checking a teammate's work consumes resources, while trusting a wrong answer can be fatal. Relative to a memoryless version of the same model, reduced verification provides an observable measure of trust. Using this framework, we study trust formation, breakage, and recovery across six frontier model snapshots. When paired with a consistently reliable teammate, four snapshots (Claude Opus 4.6, Claude Sonnet 4.6, GPT-5.1, and Gemini 3.1 Pro) reduce verification by roughly 60-85%, whereas two smaller snapshots show little or no such adjustment. Failures reverse this discount, but models differ in how they respond. Some concentrate renewed scrutiny on the culprit, while others become more cautious toward the entire team. Recovery is slower than formation, and clustered failures sustain suspicion far longer than the same number of failures spread apart. These differences have practical consequences. Models that form trust verify less, decide more quickly, and achieve higher payoffs in our environment. By contrast, persistent over-verification is associated with indecision rather than safety. Our results show that trust dispositions can be measured before deployment and suggest that calibration, rather than maximal suspicion, should be the central concern in the governance of multi-agent AI systems.

Large language model (LLM) agents have begun to delegate work to one another. Protocols such as the Model Context Protocol (MCP) and the Agent2Agent protocol (A2A) let an agent publish what it can do and let others call it, and public registries of such agents are already appearing. These protocols assume an advertised capability is a static, truthful fact. A real agent is none of these things: its competence is probabilistic, varies with input, drifts when the underlying model is updated, and, because the agent is itself a language model, it can describe itself with complete confidence and be wrong. A caller therefore sees what an agent claims to do, not what it can do, with no principled way to tell a reliable provider from a fluent impostor. We argue these difficulties share one cause: the market for lemons. When quality is hidden and claims are cheap, good and bad providers become indistinguishable, honest reliability goes unrewarded, and the market decays toward its worst participants. Economics offers three remedies, signaling, screening, and reputation, and none are present in today's agent protocols. We make four contributions: (1) a failure taxonomy that names confident-wrong as a non-adversarial, correlated subclass of Byzantine faults that classical fault-tolerance mismodels; (2) a market-for-lemons model showing that faith-based protocols admit only a low-trust equilibrium; (3) the Trust Layer, a thin, protocol-agnostic narrow waist above MCP and A2A that adds probabilistic capability descriptors, screening, and reputation, and admits a separating equilibrium when the cost of sustaining an overclaim exceeds the gain from it; and (4) a reliability-composition bound for delegation chains with an end-to-end placement argument. The design needs no model retraining and degrades gracefully when its trust anchors are absent or corrupt.

Reputation is a fundamental mechanism through which markets sustain trust when service quality cannot be perfectly assessed ex ante, constituting a form of intertemporal economic capital by attracting future demand. Its effectiveness as a disciplinary mechanism depends not only on past interactions but also on the persistence of the identity to which reputation is attached. When identities can be abandoned and recreated cheaply, reputational capital may itself become an object of opportunistic exploitation. This paper develops a dynamic economic framework to study when reputation is sufficient to discipline autonomous agents. We model reputation as capital attracting future economic activity. At each point, an agent chooses between operating honestly, investing in quality to preserve future gains, or executing a one-shot deviation to extract its reputation's value and restart from a penalized identity. Our analysis relates the temptation to opportunistic behavior to identity-reset costs, reputation persistence, demand sensitivity, and enforcement design, deriving comparative statics on optimal quality provision. Autonomous AI-agent operating on the blockchain are a relevant application: infrastructures such as ERC-8004, ERC-8183, and x402 combine reputation, identity, and payments in permissionless markets. Nonetheless, our framework applies to any environment where reputation generates future business and identities are replaceable.