Chain-of-Thought Prompting for Out-of-Distribution Samples: A Latent-Variable Study

Chain-of-Thought (CoT) prompting has emerged as a powerful technique to improve in-context learning (ICL) in large language models (LLMs) by breaking complex reasoning into intermediate steps. However, the ability of CoT to generalize under distribution shift remains poorly understood. In this work, we extend a latent-variable framework for CoT prompting and study its behavior on two prototypical out-of-distribution (OOD) scenarios: (i) the latent variables for CoT steps are permuted into novel combinations, and (ii) the latent variables uniformly scaled by a factor. Our experiments demonstrate that CoT inference generalizes effectively to OOD samples whose latent variables closely resemble those seen during training, but its performance degrades as this similarity decreases. These findings provide foundational insights into the strengths and limitations of CoT prompting under OOD conditions and suggest directions for developing more resilient reasoning strategies in future LLMs.