SMART: Self-Aware Agent for Tool Overuse Mitigation

Current Large Language Model (LLM) agents demonstrate strong reasoning and tool use capabilities, but often lack self-awareness, failing to balance these approaches effectively. This imbalance leads to Tool Overuse, where models unnecessarily rely on external tools for tasks solvable with parametric knowledge, increasing computational overhead. Inspired by human metacognition, we introduce SMART (Strategic Model-Aware Reasoning with Tools), a paradigm that enhances an agent's self-awareness to optimize task handling and reduce tool overuse. To support this paradigm, we introduce SMART-ER, a dataset spanning three domains, where reasoning alternates between parametric knowledge and tool-dependent steps, with each step enriched by rationales explaining when tools are necessary. Through supervised training, we develop SMARTAgent, a family of models that dynamically balance parametric knowledge and tool use. Evaluations show that SMARTAgent reduces tool use by 24% while improving performance by over 37%, enabling 7B-scale models to match its 70B counterpart and GPT-4o. Additionally, SMARTAgent generalizes to out-of-distribution test data like GSM8K and MINTQA, maintaining accuracy with just one-fifth the tool calls. These highlight the potential of strategic tool use to enhance reasoning, mitigate overuse, and bridge the gap between model size and performance, advancing intelligent and resource-efficient agent designs.