Hallucination in World Models is Predictable and Preventable

Hallucination remains a central failure mode of large language models, but existing benchmarks operationalize it inconsistently across summarization, question answering, retrieval-augmented generation, and agentic interaction. This fragmentation makes it unclear whether a mitigation that works in one setting reduces hallucinations across contexts. Current benchmarks either require human annotation and fixed references that may be memorized, or rely on observations in settings that are difficult to reproduce. To study root causes, we introduce HalluWorld, an extensible benchmark grounded in an explicit reference-world formulation: a model hallucinates when it produces an observable claim that is false with respect to this world. Building on this view, we construct synthetic and semi-synthetic environments in which the reference world is fully specified, the model's view is controlled, and hallucination labels are generated automatically. HalluWorld spans gridworlds, chess, and realistic terminal tasks, enabling controlled variation of world complexity, observability, temporal change, and source-conflict policy, and disentangling hallucinations into fine-grained error categories. We evaluate frontier and open-weight language models across these settings and find consistent patterns: perceptual hallucination on directly observed information is near-solved for frontier models, while multi-step state tracking and causal forward simulation remain difficult and are not generally solved by extended thinking. In the terminal setting, models also struggle with when to abstain. The uneven profile of failures across probe types and domains suggests that hallucinations arise from distinct failure modes rather than a single capability. Our results suggest that controlled reference worlds offer a scalable and reproducible path toward measuring and reducing hallucinations in modern language models.

World models are central to building agents that can reason, plan, and generalize beyond their training data. However, research on world models is currently fragmented, with disparate codebases, data pipelines, and evaluation protocols hindering reproducibility and fair comparison. Current practice is further limited by three key bottlenecks: fragile one-off codebases, slow video data loading, and the lack of standardized generalization benchmarks. We present stable-worldmodel (swm), an open-source platform for standardized and reproducible world modeling research and evaluation. It delivers (1) a high-performance Lance-based data layer with native support and conversion tools for MP4, HDF5, and LeRobot datasets, (2) clean, well-tested implementations of modern world model baselines and planning solvers, and (3) a broad suite of environments and tasks extended with controllable visual, geometric, and physical factors of variation for systematic in-silico evaluation of dynamics understanding, control performance, representation quality, and out-of-distribution generalization. By unifying the full pipeline under a single, scalable framework, \texttt{swm} dramatically reduces research overhead and accelerates trustworthy progress toward reliable world models.

Evaluating world models requires assessing both the quality of the worlds they generate and their consistency and responsiveness under exploration, interaction, and modification. We introduce HappyWorld-Bench, a comprehensive benchmark that evaluates whether generated worlds remain reliable as agents interact with them. Our design is built on a hierarchical capability framework of six world capabilities (W1-W6), from generative construction to unified world modeling, instantiated across three independent evaluation tracks: video world models, spatial world models, and embodied world models. HappyWorld-Bench comprises 1,138 video prompts, 300 spatial scenes, and 254 embodied test cases. Across all three tracks, we build and operate HappyWorld-Arena to organize human A/B comparisons and derive model-level Elo ratings, which complement newly designed automated metrics that capture behavioral correctness. We evaluate 14 video world models, 9 spatial systems, and 8 embodied candidates under this unified framework. Results reveal remaining reliability gaps across all three tracks: video models exhibit reduced consistency during extended rollouts and revisits, spatial models achieve at best 70.14% placement accuracy and 73.33% edit execution, and embodied models struggle to preserve state across multi-step actions and respond precisely to altered action conditions and physical rules. These findings highlight the need to evaluate world models not only by visual quality, but also by state consistency and the correctness of their responses to actions and interventions.