From Passive Delegates to Strategic Negotiators: Reinforcing Social Reasoning in Small Language Models with SocialRL
Organizations: Microsoft Research, AI Frontiers
Abstract
AI agents increasingly act on their users' behalf, handling tasks such as scheduling meetings, comparing offers, and haggling over prices. These principal-driven tasks routinely place the agent across from a counterpart (another user's agent, a seller, a recruiter) whose goals may conflict with its principal's. Yet the dispositions that make an assistant pleasant can make it a poor delegate: a friendly, helpful frontier model may disclose its principal's private information unprompted and concede at the first sign of resistance. We present SocialRL, a general recipe that trains social reasoning directly, and apply it to a 4B model across six domains: Deal-or-No-Deal, CaSiNo, Craigslist, Job Interview, Calendar, and Marketplace. Every domain is trained in-domain under the same recipe, and every policy is evaluated on all six. We find that (1) in-domain training reaches the frontier: on held-out scenarios the 4B matches or exceeds the GPT-5 family per domain, closing 73-122% of the baseline-to-frontier gap on the negotiation games, with 78% of buyer openings anchoring below target versus 3% untrained; (2) cross-domain transfer follows game structure: structurally paired games lift each other, a broad multi-issue donor lifts nearly all domains, and structurally isolated games transfer nothing; (3) guided by this transfer structure, two strategies, cascade RL and multi-teacher on-policy distillation (OPD), consolidate the per-domain specialists into a single unified 4B that reaches 0.627 average utility across all six environments, matching or exceeding GPT-4.1 (0.625), GPT-5.1 (0.619), and GPT-5.2 (0.613); (4) an explicit theory-of-mind scaffold helps only through training: distilling the ToM trace, rather than actions alone, lifts utility on every environment and generalizes better across them, and of the two ToM skills, only next-action prediction predicts negotiation outcomes.
Figures & tables
| Domain | Structure | Issues | Private information | Roles |
|---|---|---|---|---|
| Deal-or-No-Deal | multi-issue allocation | 3 item types | per-item values | symmetric |
| CaSiNo | multi-issue allocation | 3 resources | priority order | symmetric |
| Craigslist | single-issue price | price | target / listing price | asymmetric |
| Job Interview | multi-issue contract | 5 issues | utility weights | asymmetric |
| Calendar | slot coordination | time slots | slot preferences | asymmetric |
| Marketplace | single-issue price | price | reservation price | asymmetric |
| DnD | CaSiNo | Craigslist | Job Int. | Calendar | Mktplace | Avg. | |
| Base 4B | 0.389 | ||||||
| Domain-trained 4B | 0.619 | ||||||
| GPT-4.1 | 0.653 | 0.491 | 0.540 | 0.588 | 0.673 | 0.804 | 0.625 |
| GPT-5.1 | 0.671 | 0.499 | 0.607 | 0.596 | 0.573 | 0.767 | 0.619 |
| GPT-5.2 | 0.663 | 0.488 | 0.577 | 0.579 | 0.643 | 0.727 | 0.613 |
| GPT-5.5 | 0.665 | 0.559 | 0.746 | 0.590 | 0.702 | 0.985 | 0.708 |
| Donor | DnD | CaSiNo | Craigslist | Job Int. | Calendar | Mktplace | Out-tr. |
|---|---|---|---|---|---|---|---|
| Baseline | — | ||||||
| Deal-or-No-Deal | |||||||
| CaSiNo | |||||||
| Craigslist † | |||||||
| Job Interview | |||||||
| Calendar |
| Stage completed | Step | DnD | CaSiNo | Craigslist | Job Int. | Calendar | Mktplace | Mean seen |
|---|---|---|---|---|---|---|---|---|
| Calendar | 100 | — | — | 0.614 | — | 0.621 | — | 0.617 |
| CaSiNo | 40 | — | 0.504 | 0.517 | — | 0.733 | — | 0.585 |
| Deal-or-No-Deal | 100 | 0.618 | 0.498 | 0.489 | — | 0.758 | — | 0.591 |
| Craigslist | 40 | 0.628 | 0.477 | 0.544 | — | 0.729 | — | 0.595 |
| Marketplace | 140 | 0.628 | 0.483 | 0.564 | — | 0.704 | 0.842 | 0.644 |
| Job Interview | 60 | 0.620 | 0.513 | 0.570 | 0.529 | 0.692 | 0.823 | 0.625 |
| Environment | Transfer-aware | Random | Anti-transfer |
|---|---|---|---|
| Deal-or-No-Deal | |||
| CaSiNo | |||
| Craigslist | |||
| Job Interview | |||
| Calendar | |||
| Marketplace |
| Configuration | Avg-6 | Gap closure | Clipped gap closure |
|---|---|---|---|
| Gap-closed, w/o CaSiNo | % | % | |
| Equal mix, w/o CaSiNo | % | % | |
| Equal mix, w/ CaSiNo | % | % | |
| Gap-closed, w/ CaSiNo | % | % | |
| Student initialization | 0.460 | — | — |
| Teacher average | 0.619 | — | — |
| Environment | Unified 4B | Initialization | Teacher | Gap closed |
|---|---|---|---|---|
| Deal-or-No-Deal | 0.586 | |||
| Craigslist | 0.397 | |||
| CaSiNo † | 0.502 | — | ||
| Job Interview | 0.456 | |||
| Calendar | 0.375 | |||
| Marketplace | 0.444 |
| Normal SFT | ExpToM SFT | ||||||
|---|---|---|---|---|---|---|---|
| Environment | Base 4B | +ToM prompt | per-env | mixed | per-env | mixed | GPT-5.2 |
| Deal-or-No-Deal | 0.589 | 0.575 | 0.580 | 0.587 | 0.596 | 0.608 | 0.655 |
| CaSiNo | 0.454 | 0.391 | 0.492 | 0.480 | 0.512 | 0.498 | 0.475 |
| Craigslist | 0.295 | 0.225 | 0.445 | 0.409 | 0.552 | 0.478 | 0.511 |
| Job Interview | 0.476 | 0.221 | 0.482 | 0.503 | 0.522 | 0.517 | 0.626 |
| Average | 0.454 | 0.353 | 0.500 | 0.495 | 0.546 | 0.525 | 0.567 |
| Stage | Open | 2nd | 3rd | 4th | % open target |
|---|---|---|---|---|---|
| Untrained | 3% | ||||
| SFT | 71% | ||||
| SFT PPO | 78% |
| Env | Stage | Turns | Polite | Firm |
|---|---|---|---|---|
| CaSiNo | untrained | 2.5 | 16% | 1% |
| SFT | 3.4 | 10% | 4% | |
| PPO | 3.4 | 59% | 11% | |
| DnD | untrained | 2.9 | 8% | 2% |
| SFT | 3.1 | 15% | 23% | |
| PPO | 3.2 | 36% | 2% |