[2605.22672] Is Capability a Liability? More Capable Language Models Make Worse Forecasts When It Matters Most

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Computer Science > Artificial Intelligence

arXiv:2605.22672 (cs)

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[Submitted on 21 May 2026]

Title:Is Capability a Liability? More Capable Language Models Make Worse Forecasts When It Matters Most

Authors:Nick Merrill, Jaeho Lee, Ezra Karger<br>View a PDF of the paper titled Is Capability a Liability? More Capable Language Models Make Worse Forecasts When It Matters Most, by Nick Merrill and 2 other authors

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Abstract:We document inverse scaling in LLMs on forecasting problems whose underlying time series exhibit superlinear growth and tail risk of regime change, a structure common in finance and epidemiology. On these tasks, more capable models produce worse distributional forecasts. The pattern appears on ForecastBench-Sim (FBSim), a contamination-free, simulated-world benchmark we release, in forecasting synthetic SIR epidemics with a matched linear control, and replicates in real-world datasets on COVID-19, measles, housing markets, and hyperinflation. A per-quantile decomposition shows the failure concentrates at the upper tail, which more capable models shift upward to track aggressive extrapolations of growth, while the lower tail stays put. A within-family study of Llama-3.1 shows that both model scale and post-training independently contribute to this effect. Domain knowledge does not reliably rescue calibration. This inverse scaling does not appear on single-threshold metrics common in LLM forecasting benchmarks, reversing the sign of the capability--accuracy relationship on identical outputs. Single-threshold scoring at conventional cutoffs misses the upper-tail cost; tail-inclusive scoring reverses the sign of the capability--accuracy relationship on the same outputs. We recommend that LLM forecasting evaluations use continuous (and unbounded) measures of accuracy alongside bounded binary threshold metrics.

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Artificial Intelligence (cs.AI)

Cite as:<br>arXiv:2605.22672 [cs.AI]

(or<br>arXiv:2605.22672v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2605.22672

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arXiv-issued DOI via DataCite (pending registration)

Submission history<br>From: Nick Merrill [view email]<br>[v1]<br>Thu, 21 May 2026 16:14:33 UTC (298 KB)

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