How To Train Your World Model: Fine-tuning vs RAG for LM-based World Modeling

arXiv:2610.02542v1 Announce Type: new Abstract: World models (WMs) simulate the transition dynamics of environments, enabling agents to plan over the consequences of their actions. In text-based environments, fine-tuning a Language Model (LM) to serve as a WM has emerged as a dominant paradigm. However, despite the widespread success of non-parametric approaches such as Retrieval Augmented Generation (RAG), retrieval for LM-based world modelling remains underexplored. We conduct a systematic evaluation across five diverse environments spanning embodied, web navigation and social settings, comp

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