The Deterministic Horizon: When Extended Reasoning Fails and Tool Delegation Becomes Necessary

Abstract

Extended chain-of-thought reasoning can degrade performance on deterministic state-tracking tasks, not solely because of preference biases but, on the evidence we present, because of information-theoretic limits in the capacity of decoder-only attention. We present: (1) an Attention Bottleneck analysis providing evidence that total state-tracking capacity in bits is bounded in terms of head count, head dimension, and context length under stated modeling assumptions, and that total capacity is not the binding constraint; (2) a context-dependent error model with a depth-dependent quadratic term in the error exponent; (3) the State-Space Jaccard metric measuring state drift; and (4) a Deterministic Horizon $d^{\ast }\in [19,31]$ (at $\alpha =0.5$) marking the depth at which unaided accuracy crosses 50%. Across twelve models and eight task domains (including SWE-Bench, WebArena, and SQL-Multi), tool-integrated reasoning reaches 76-94% accuracy versus 17-42% for neural chain-of-thought on PermutationProbe. Fine-tuning on optimal-length traces yields $<$3 percentage-point improvement, supporting an architectural ceiling.