Context Localization for Generalized Level-Based Evaluation in Knowledge-Based Systems

Recent benchmarks reveal that despite strong reasoning capabilities, large language models (LLMs) still struggle to faithfully apply complex contextual knowledge. These failures are often not wholesale reasoning collapses: in context-rich tasks, models may follow the central reasoning path while missing peripheral, persistent, or format-sensitive requirements.

Biomedical discovery often requires connecting broad biomedical knowledge with specific experimental or clinical data. Background knowledge suggests relevant mechanisms but is usually too general to map directly onto dataset variables, while data-driven patterns can be dataset-specific and hard to interpret mechanistically. We study this missing link as knowledge contextualization: transforming broad biomedical knowledge into evidence-supported, scenario-grounded propositions that domain experts can inspect, replay, and validate. We propose SCENE, a bi-level multi-agent framework that treats knowledge contextualization as iterative search. The upper level converts broad knowledge into search directions and grounds them in the dataset schema. The lower level executes these directions through multi-objective optimization to identify concrete propositions that balance evidential strength and data support. Feedback between the two levels progressively refines the search. We evaluate SCENE in two settings: discovering patient subgroups with heterogeneous treatment benefits in clinical trial scenarios, and identifying context-specific biological responses in LINCS L1000 studies. In clinical trials, SCENE discovers specific, well-supported subgroups and outperforms existing baselines. In L1000 studies, SCENE identifies perturbational contexts with strong target-response matching and high positive rates. These results show that SCENE bridges broad knowledge and scenario-specific evidence, producing traceable, inspectable hypotheses for follow-up validation.

A retrieval-augmented language model answers from two sources, the retrieved context and its own knowledge, and the two disagree whenever the context is incomplete or wrong. Existing methods settle the disagreement with a rule fixed at design time: follow the context, amplify it in proportion to how far it moves the model, or trust the model's memory. Each rule is confidently wrong in some deployment. In a decision-theoretic model of two sources, the score of any fixed rule is linear in the share of reliable contexts while the best attainable score is convex, so every fixed rule is beaten wherever it is not exactly optimal; and a symmetric divergence between the two sources, the signal adaptive decoding uses, carries no information about which one is right. Resolving a conflict therefore needs two inputs that no existing method keeps: evidence about each source separately, and a prior on how often the context is right. We test these claims on GRACE, a benchmark that intervenes on the knowledge-graph context of a fixed question, so that what the model knows, what the context says and what is true are measured separately. There, every baseline from four families is strong on right contexts or on wrong ones, never on both. We then build the two inputs: the model states its knowledge as notes, a small policy voices each note with a calibrated confidence, a reader answers in two voices, and a selector commits or abstains under a prior $π$ applied as an exact prior shift. With $π$ set to the true share of right contexts, the system is above the best baseline at every mixture of GRACE contexts, by up to 26 points. Its overall score is 45.3 and 35.0 (Qwen3.5-35B-A3B, Llama-3.1-8B), against 29.4 and 27.5 for the best baseline. On preregistered ClashEval it beats same-backbone CK-PLUG and TCR by 12 and 26 points. Where the model lacks the knowledge, the gains vanish, as the theory predicts.