Can Hallucinations Be Useful? Solving Multi-Hop Questions With SLMs By Chaining System-I/II Reasoning

arXiv:2605.27596v1 Announce Type: new Abstract: Recently, there has been increased interest in Small Language Models (SLMs), which are fast, show good performance, and have lower hardware demands than large language models (LLMs). However, SLMs hallucinate more frequently than LLMs, impacting their ability to solve complex multi-step reasoning problems as early mistakes cascade to the final response. To address this, existing works think-first followed by iterative retrieval to reduce hallucina