Scaling Small Agents Through Strategy Auctions

Small language models are viewed as a promising, cost-effective approach to agentic AI, yet how their performance scales with task complexity remains unclear. While smaller agents match larger ones on simple tasks, it is unknown when large models become necessary and how to better leverage small agents. In this work, we show that small agents fail to scale with task complexity on deep search and coding tasks, and introduce Strategy Auctions for Workload Efficiency (SALE), a framework inspired by freelancer marketplaces. In SALE, agents bid with strategic plans scored by a cost–value mechanism and refined via shared auction memory, enabling per-task routing and continual self-improvement without training a router. On average, SALE reduces reliance on the largest agent by 53%, lowers overall cost by 35%, and consistently improves pass@1 with only a negligible token overhead. In contrast, established routers either underperform the largest agent or fail to reduce cost. These results suggest that small agents can be effectively “scaled up” through coordinated allocation and test-time self-improvement. More broadly, they motivate a systems-level view of agentic AI in which gains come less from ever-larger individual models and more from market-inspired coordination mechanisms that organize heterogeneous agents into efficient, adaptive ecosystems.