Act or Escalate? Evaluating Escalation Behavior in Automation with Language Models

arXiv:2604.08588v1 Announce Type: cross Abstract: Effective automation hinges on deciding when to act and when to escalate. We model this as a decision under uncertainty: an LLM forms a prediction, estimates its probability of being correct, and compares the expected costs of acting and escalating. Using this framework across five domains of recorded human decisions-demand forecasting, content recommendation, content moderation, loan approval, and autonomous driving-and across multiple model fam