Persuaded, Not Informed: Incentive-Misaligned Witnesses Defeat In-Context Grounding

Rahul Balakavi

Language-model agents increasingly answer questions over customer-relationship management (CRM) records, such as whether to qualify a sales lead. We identify a failure mode not addressed by a stronger model: when the context contains an assertion by a party with an incentive toward optimism - here the sales representative, a witness recorded in the CRM - the model treats the assertion as evidence and clears deals the company's own records deem unacceptable. Across 100 lead-qualification tasks from CRMArena-Pro, the representative asserts an acceptable timeline in every call and an acceptable budget in 76; on the 31 tasks where such an assertion contradicts the price list and installation policy, a model reading only the transcript clears the deal in 29 of 31 cases. The signature is consistent across seven models from four providers (misled on 87-97%); scale and explicit reasoning confer no resistance. Only 3 of 35 genuine failures involve no assertion: the failure is persuasion, not missing information. We contribute a diagnostic method rather than an architecture: (i) a bucket analysis that separates persuasion from information gaps, (ii) a same-information control showing that…