The Illusion of Thinking: Understanding the Strengths and Limitations of Reasoning Models via the Lens of Problem Complexity

Recent generations of frontier language models have introduced Large Reasoning Models (LRMs) that generate detailed thinking processes before providing answers. While these models demonstrate improved performance on reasoning benchmarks, their fundamental capabilities, scaling properties, and limitations remain insufficiently understood. Current evaluations primarily focus on established mathematical and coding benchmarks, emphasizing final answer accuracy. However, this evaluation paradigm often suffers from data contamination and does not provide insights into the reasoning traces' structure and quality. In this work, we systematically investigate these gaps with the help of controllable puzzle environments that allow precise manipulation of compositional complexity while maintaining consistent logical structures.