Confidence Laundering in Agent Systems: Why Uncertainty Needs a Latent Carrier
Authors: Kaiwen Shi, Zheyuan Zhang, Han Bao, Colby Nelson, Yanfang Ye
Abstract
Modern agent systems can turn uncertainty into overconfidence. Fragile upstream decisions are often exposed to downstream components as clean intermediate artifacts, while the uncertainty behind those decisions is lost at the interface. As a result, local ambiguity can become system-level error amplification. We argue that this reveals an interface bottleneck in agent uncertainty propagation: uncertainty does not propagate simply because a trajectory contains uncertain steps; it propagates only when it survives the handoff between components. We define uncertain decision handoff as the transfer of an intermediate decision made under uncertainty, and identify confidence laundering as a failure mode in which fragile upstream states are repackaged as procedurally valid artifacts that downstream agents over-trust. To address this bottleneck, we propose latent uncertainty as an uncertainty-bearing carrier attached to decision handoffs. Rather than replacing text with hidden states, latent uncertainty aims to preserve pre-commitment fragility in a form that downstream components can use. This position shifts agent uncertainty propagation from step-wise uncertainty estimation toward uncertainty-preserving interface design for more recoverable agent systems.
LLM-based multi-agent systems (MAS) solve complex tasks through communication among role-specialized agents. However, inter-agent dependencies introduce reliability risks beyond isolated agent failures. For instance, errors in intermediate messages could be inherited and amplified by downstream agents. Existing uncertainty quantification (UQ) methods mainly target isolated responses or single-agent reasoning, and therefore fail to capture uncertainty propagation in MAS. To this end, we propose PropUQ-MAS, an error propagation-aware UQ framework that represents MAS execution as a communication-structured graph and estimates each step's reliability by combining local uncertainty with uncertainty inherited from upstream messages. Extensive experiments demonstrate that PropUQ-MAS consistently improves UQ in MAS, with average relative gains of +6.10% in AUROC and +47.58% in PRR.
Uncertainty in large language model (LLM)-based systems is often studied at the level of a single model output, yet deployed LLM applications are compound systems in which uncertainty is transformed and reused across model internals, workflow stages, component boundaries, persistent state, and human or organisational processes. Without principled treatment of how uncertainty is carried and reused across these boundaries, early errors can propagate and compound in ways that are difficult to detect and govern. This paper develops a systems-level account of uncertainty propagation. It introduces a conceptual framing for characterising propagated uncertainty signals, presents a structured taxonomy spanning intra-model (P1), system-level (P2), and socio-technical (P3) propagation mechanisms, synthesises cross-cutting engineering insights, and identifies five open research challenges.
Early failure prediction is important for long-horizon agents, as it enables timely intervention and can reduce inference and tool-use costs. Uncertainty quantification, such as verbal confidence and perplexity, offers a promising approach to detecting agent failures; however, it has not been explored whether these signals retain their discriminative power during the intermediate stages of long-horizon execution. We evaluate mainstream uncertainty signals on deep-research tasks and find that verbal confidence reliably distinguishes failures at trajectory completion, achieving a mean AUROC of 0.85, whereas all evaluated signals offer limited predictive value earlier in execution, with none exceeding a mean AUROC of 0.60 at 50% trajectory progress. We identify an underlying mechanism explaining this gap: path switching, where agents frequently abandon their current search direction in-trajectory, breaking the link between early signal and final outcome. These findings challenge the assumption that intermediate uncertainty can reliably guide early intervention. They also motivate a practical recommendation for agent harnesses in deep-research settings: use final-step confidence to decide whether to restart, an approach that our experiments find more effective than in-trajectory intervention.