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arXiv preprint

Why Language Models Hallucinate

Training and evaluation can reward a confident guess. Understand the statistical argument, design abstention-aware scores and test the cost of miscalibration.

Breakdown by FDE Interviews · 11 min read · Updated

About the original · 2025
AUTHORS
Kalai, Nachum, Vempala, Zhang
FROM
OpenAI, Georgia Tech
PUBLISHED
Sep 2025 · arXiv preprint
IN THIS BREAKDOWN · 10 SECTIONS

You can read 15% of this breakdown.

01

The paper in one minute

A model that earns a point for a correct answer and loses nothing for a wrong one has a reason to guess. Saying it does not know earns nothing too. Even a poorly supported answer offers some chance of increasing its score. That incentive is a central explanation in this paper for why confident factual errors survive post-training.

The other half concerns pretraining. The authors connect generating valid text to distinguishing valid statements from errors. If the available data and model cannot reliably make that distinction, learning the language distribution can assign probability to plausible falsehoods even when the training examples themselves are correct. Rare arbitrary facts are a useful example: knowing the birthdays of many people does not reveal another person's birthday.

The mathematical result has assumptions and correction terms. It is not a proof that every assistant must make factual errors, nor a measured hallucination rate for your system. A restricted application can answer from verified records and abstain elsewhere. The paper explicitly recognizes that possibility.

For deployment, its most useful recommendation is to change what success means. Score appropriate abstention and costly errors separately, and tell the system which confidence target matters. Then measure whether the resulting behavior matches that target.

THE IDEA, VISUALLY
WHAT DOES YOUR SCORE REWARD? The questions stay fixed. The decision to answer changes. Answer every question 215 85 215 correct · 85 wrong · 0 abstain Utility: −550 Answer above 0.90 95 200 95 correct · 5 wrong · 200 abstain Utility: +50 Correct: +1 Wrong: −9 Abstain: 0 Synthetic calibrated groups. A confidence threshold needs validation after distribution shift.
Original illustration of the executed synthetic exercise. Correct answers earn one point, errors lose nine and abstentions earn zero. The counts and utilities are our teaching example, not measurements of an LLM.
Research notes: the problem, approach and results
0.90

example confidence target in section 4.2

9 points

error penalty at that target, section 4.2

3 points

corrected penalty for target 0.75, derived from its formula

THE PROBLEM

A system can gain benchmark accuracy by guessing where a customer would prefer an explicit unknown.

THE IDEA

Connect generation errors to a classification problem, then make abstention rational through an explicit error penalty.

THE RESULT

The paper explains statistical and evaluation incentives. Applying the lesson requires calibrated decisions and a useful escalation path.

02

Why it matters to an FDE

A customer asking for fewer hallucinations usually wants fewer unsupported answers reaching a consequential workflow. An aggregate accuracy score cannot tell you whether an updated assistant became safer or simply answered more questions.

Consider an assistant that explains account-specific policy. A wrong answer may trigger rework; an explicit unknown can go to an operator with the relevant record attached. These outcomes have different costs. Your evaluation should preserve that difference instead of marking both as equally unsuccessful.

Start by specifying what counts as supported, when the assistant may request clarification, and who receives an unresolved case. Compare the fraction of requests answered with the error rate among those answers. Review both on difficult customer slices. The calibration and uncertainty concept provides the measurement vocabulary; this paper explains why the incentives behind that measurement matter.

THE FULL BREAKDOWN

Understand the mechanism. Try it on a real problem.

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  • ◇1 architecture diagram
  • </>2 runnable code blocks
  • ▦3 results tables
  1. 03Key takeaways

    Six distinctions that keep an abstention policy useful and its claims defensible

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  2. 04How it works

    Follow the classification reduction and derive a usable answer-or-abstain threshold

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  3. 05The numbers that matter

    Read the bound with its assumptions and correct a printed threshold example

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  4. 06Try it yourself

    Score identical synthetic questions under guessing, abstention and a calibration failure

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  5. 07Where it breaks

    Identify the assumptions a confidence threshold and a hallucination score can violate

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  6. 08Using it on a deployment

    Define costs, build an answerability set and monitor the operator workload you create

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  7. 09Interview angles

    Explain scoring incentives, the limits of the theory and the cost of abstention

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