How Fast Do Agents Rot? An Empirical Study of Long-Horizon Degradation in LLM Agents for Production Decision-Making

Production deployments of large language model (LLM) agents remain unreliable on long, multi-step workflows even as benchmark success rates climb steadily. We argue this gap is largely an artifact of task horizon: benchmarks are dominated by short-to-medium horizons where success remains high, while production workloads demand an order of magnitude more dependent steps. We measure the effect directly, characterizing the shape of agent degradation and disentangling its cause across a large controlled study spanning nine models, six open models from 1.2B to 671B parameters, and three deployed proprietary systems; four task families, including a genuinely agentic tool-use loop; five horizons; and three context regimes. Task success follows a geometric law governed by a single per-step reliability parameter, which rises with model scale but saturates well below 1 even for the strongest models, guaranteeing eventual collapse at sufficiently long horizons. The effect is sharpest on the agentic task, where every model tested, including widely deployed systems, falls from near-perfect success to near zero within sixteen steps of (n=10,664 analyzed trajectories. Degradation is driven by step count rather than context length: bounding the context window steepens decay rather than easing it (logit slope-0.69 vs. -0.44), p=3x10-6), contradicting a lost-in-the-middle explanation and warning against a common production shortcut. Projecting measured reliability onto representative benchmark horizons quantifies a substantial gap between benchmark and production conditions, from 0.42 at GAIA-length horizons to 0.24 at hundred-step production horizons. For teams responsible for agent orchestration and reliability at scale, these results argue for horizon-aware evaluation and reliability budgeting in place of aggregate pass-rate metrics. Code, prompts, seeds, and raw trajectories are released.