The Price of Thought: Does Test-Time Reasoning Pay in LLM Trading?

Large language models (LLMs) have demonstrated impressive reasoning capabilities by scaling test-time compute via long Chain-of-Thought (CoT). However, recent findings suggest that raw token counts are unreliable proxies for reasoning quality: increased generation length does not consistently correlate with accuracy and may instead signal "overthinking," leading to performance degradation. In this work, we quantify inference-time effort by identifying deep-thinking tokens -- tokens where internal predictions undergo significant revisions in deeper model layers prior to convergence. Across four challenging mathematical and scientific benchmarks (AIME 24/25, HMMT 25, and GPQA-diamond) and a diverse set of reasoning-focused models (GPT-OSS, DeepSeek-R1, and Qwen3), we show that deep-thinking ratio (the proportion of deep-thinking tokens in a generated sequence) exhibits a robust and consistently positive correlation with accuracy, substantially outperforming both length-based and confidence-based baselines. Leveraging this insight, we introduce Think@n, a test-time scaling strategy that prioritizes samples with high deep-thinking ratios. We demonstrate that Think@n matches or exceeds standard self-consistency performance while significantly reducing inference costs by enabling the early rejection of unpromising generations based on short prefixes.

Recent advancements in Large Language Models (LLMs) have significantly enhanced their ability to perform complex reasoning tasks, transitioning from fast and intuitive thinking (System 1) to slow and deep reasoning (System 2). While System 2 reasoning improves task accuracy, it often incurs substantial computational costs due to its slow thinking nature and inefficient or unnecessary reasoning behaviors. In contrast, System 1 reasoning is computationally efficient but leads to suboptimal performance. Consequently, it is critical to balance the trade-off between performance (benefits) and computational costs (budgets), giving rise to the concept of reasoning economy. In this survey, we provide a comprehensive analysis of reasoning economy in both the post-training and test-time inference stages of LLMs, encompassing i) the cause of reasoning inefficiency, ii) behavior analysis of different reasoning patterns, and iii) potential solutions to achieve reasoning economy. By offering actionable insights and highlighting open challenges, we aim to shed light on strategies for improving the reasoning economy of LLMs, thereby serving as a valuable resource for advancing research in this evolving area. We also provide a public repository to continually track developments in this fast-evolving field.

Scaling test-time compute through extended chains of thought has become a dominant paradigm for improving large language model reasoning. However, existing research implicitly assumes that longer thinking always yields better results. This assumption remains largely unexamined. We systematically investigate how the marginal utility of additional reasoning tokens changes as compute budgets increase. We find that marginal returns diminish substantially at higher budgets and that models exhibit ``overthinking'', where extended reasoning is associated with abandoning previously correct answers. Furthermore, we show that optimal thinking length varies across problem difficulty, suggesting that uniform compute allocation is suboptimal. Our cost-aware evaluation framework reveals that stopping at moderate budgets can reduce computation significantly while maintaining comparable accuracy.