How Do Language Models Choose Between Context and Memory?
Authors: Benjamin Shih, John Winnicki, Arianna Cao
Organizations: Stanford University · Perpetual Labs
Abstract
When contextual information conflicts with the knowledge stored in model parameters, activation directions can be used to decode and steer which source the model follows. However, steering along a direction does not establish causality: whether the unedited model would naturally use that direction or whether the direction is reusable across tasks. We test these distinctions through counterfactual experiments in unambiguous settings. First, we estimate authority directions from agreement prompts, in which the context and parametric knowledge support the same answer. We then interchange naturally occurring coordinates along these directions between matched prompts that direct the model to prioritize either the supplied context or its parametric knowledge. Across Qwen, Llama, and OLMo models, this intervention reproduces 30-68% of the authority-induced shift in source choice, whereas matched controls reproduce almost none. To test cross-task reuse, we learn authority directions on two tasks separately and see that cross-task transferability closes only 9% of the authority gap while the local direction learned on the given task closes 57%. These results distinguish authority representation, causal use, and cross-task causal reuse, and suggest that authority computations may be task-dependent, rather than reusable across tasks.
Language models used in retrieval-augmented settings must arbitrate between parametric knowledge stored in their weights and contextual information in the prompt. This work presents a mechanistic study of that choice by extracting an \emph{arbitration vector} from model activations on a curated dataset designed to disentangle (i) irrelevant contexts that elicit parametric recall and (ii) relevant but false contexts that elicit copying. The vector is computed as the residual-stream centroid difference between these regimes across 27 relations, and is injected as an additive intervention at selected layers and token spans to steer behavior in two directions: Copy→Recall (suppressing context use) and Recall→Copy (inducing the model to copy any token from the context). Experiments on three architectures (decoder-only and encoder/decoder) and two open-domain QA benchmarks show consistent behavior shifts under moderate scaling while monitoring accuracy and fluency. Mechanistic analyses of attention routing, MLP contributions, and layer-wise probability trajectories reveal an asymmetry: inducing copying is an easy reactivation'' process that can be triggered at different locations in the input, while restoring recall is a suppression'' process that is more fragile and strongly tied to object-token interventions.
Mehrdad Farahani, Franziska Penzkofer, Richard Johansson
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.
The literature on how large language models handle conflict between their training knowledge and a contradicting document presents a persistent empirical contradiction: some studies find models stubbornly retain their trained answers, ignoring provided documents nearly half the time, while others find models readily defer to the document, following context approximately 96% of the time. We argue these contradictions dissolve once one recognises that prior experiments have studied three qualitatively distinct processing situations without distinguishing them. We propose a three-regime framework: Regime 1 (single-source updating, dominant predictor: evidence coherence), Regime 2 (competitive integration, dominant predictor: parametric certainty), and Regime 3 (task-appropriate selection, dominant predictor: task knowledge requirement). We formalise a distinction between parametric strength (exposure frequency) and parametric uniqueness (encoding consistency), showing empirically that these are orthogonal dimensions (r = -0.002, p = .97) with strength as the operative predictor in stable factual domains. We validate the framework across Claude Sonnet 4.6, GPT-5.5, Gemini 2.5 Flash, Llama 4 Maverick, and DeepSeek V3 using 9,970 API calls in three experimental phases. GEE logistic regression confirms the predicted Regime 2 certainty gradient for all five models (beta = -0.38 to -0.50, all p <= .013, BH-FDR corrected). A Regime 3 ablation shows task framing alone flips context-following from near-100% (contextual knowledge condition) to 6-71% (parametric knowledge condition), with all five models significant (p < .001). The certainty gradient is robust to multinomial outcome modeling, sensitivity analyses for hedging responses, and FDR correction.