Talk is Cheap, Communication is Hard: Dynamic Ground- ing Failures and Repair in Multi-Agent Negotiation

Yiheng Yao, Chelsea Zou, Robert D. Hawkins

Abstract:

Grounding is the collaborative process of establishing mutual belief sufficient for a
communicative goal. While static grounding maps language to a shared context, dynamic
grounding requires agents to negotiate meaning across turns. Current multi-agent Large
Language Model (LLM) benchmarks largely emphasize static, one-shot tasks, overlooking
whether agents can repair grounding breakdowns through interaction. We introduce
an iterated multi-turn negotiation game where two agents allocate shared resources to
private projects with verifiable jointly optimal outcomes. Although individual agents
can identify Pareto-optimal allocations in isolation, agent dyads consistently fail to reach
them across models. We identify four failure modes: (1) loss of shared interaction
history, (2) stubborn anchoring to early proposals, (3) defaulting to equal splits over
reward-maximizing coordination, and (4) referential binding errors across turns. Our
baselines show that the coordination gap is not explained by individual reasoning limits or
insufficient information exchange alone. Instead, the bottleneck lies in dynamic grounding:
joint plan formation, commitment, and execution.