{"id":1184948,"date":"2026-08-27T12:35:05","date_gmt":"2026-08-27T19:35:05","guid":{"rendered":"https:\/\/www.microsoft.com\/en-us\/research\/publication\/from-passive-delegates-to-strategic-negotiators-reinforcing-social-reasoning-in-small-language-models-with-socialrl\/"},"modified":"2026-09-02T17:25:56","modified_gmt":"2026-09-03T00:25:56","slug":"from-passive-delegates-to-strategic-negotiators-reinforcing-social-reasoning-in-small-language-models-with-socialrl","status":"publish","type":"msr-research-item","link":"https:\/\/www.microsoft.com\/en-us\/research\/publication\/from-passive-delegates-to-strategic-negotiators-reinforcing-social-reasoning-in-small-language-models-with-socialrl\/","title":{"rendered":"From Passive Delegates to Strategic Negotiators: Reinforcing Social Reasoning in Small Language Models with SocialRL"},"content":{"rendered":"\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AI agents increasingly act on their users&#8217;behalf, handling tasks such as scheduling meetings, comparing offers, and haggling over prices. These principal-driven tasks routinely place the agent across from a counterpart (another user&#8217;s agent, a seller, a recruiter) whose goals may conflict with its principal&#8217;s. Yet the dispositions that make an assistant pleasant can make it a poor delegate: a friendly, helpful frontier model may disclose its principal&#8217;s private information unprompted and concede at the first sign of resistance. We present SocialRL, a general recipe that trains social reasoning directly, and apply it to a 4B model across six domains: Deal-or-No-Deal, CaSiNo, Craigslist, Job Interview, Calendar, and Marketplace. Every domain is trained in-domain under the same recipe, and every policy is evaluated on all six. We find that (1) in-domain training reaches the frontier: on held-out scenarios the 4B matches or exceeds the GPT-5 family per domain, closing 73-122% of the baseline-to-frontier gap on the negotiation games, with 78% of buyer openings anchoring below target versus 3% untrained; (2) cross-domain transfer follows game structure: structurally paired games lift each other, a broad multi-issue donor lifts nearly all domains, and structurally isolated games transfer nothing; (3) guided by this transfer structure, two strategies, cascade RL and multi-teacher on-policy distillation (OPD), consolidate the per-domain specialists into a single unified 4B that reaches 0.627 average utility across all six environments, matching or exceeding GPT-4.1 (0.625), GPT-5.1 (0.619), and GPT-5.2 (0.613); (4) an explicit theory-of-mind scaffold helps only through training: distilling the ToM trace, rather than actions alone, lifts utility on every environment and generalizes better across them, and of the two ToM skills, only next-action prediction predicts negotiation outcomes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>AI agents increasingly act on their users&#8217;behalf, handling tasks such as scheduling meetings, comparing offers, and haggling over prices. These principal-driven tasks routinely place the agent across from a counterpart (another user&#8217;s agent, a seller, a recruiter) whose goals may conflict with its principal&#8217;s. Yet the dispositions that make an assistant pleasant can make it [&hellip;]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"msr-url-field":"","msr-podcast-episode":"","msrModifiedDate":"","msrModifiedDateEnabled":false,"ep_exclude_from_search":false,"_classifai_error":"","msr-author-ordering":[{"type":"user_nicename","value":"Wenyue Hua","user_id":"44010"},{"type":"user_nicename","value":"Zachary Huang","user_id":"44011"},{"type":"user_nicename","value":"Tyler Payne","user_id":"43967"},{"type":"user_nicename","value":"Safoora Yousefi","user_id":"43530"},{"type":"user_nicename","value":"Saleema Amershi","user_id":"33505"},{"type":"user_nicename","value":"Asli 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