Reasoning Effort and Thinking Budgets

Reasoning models are trained to produce a chain of intermediate reasoning before their final answer. That reasoning is made of tokens, just like the answer, and generating it takes time and money. Providers let you control how much of it happens. OpenAI exposes a reasoning_effort parameter on its reasoning models with levels such as low, medium and high; some newer models add a minimal level. Anthropic's extended thinking on supported Claude models takes a budget_tokens value that sets the maximum number of tokens Claude may use for thinking; the budget has a minimum of 1,024 tokens and must be smaller than max_tokens. Google's Gemini 2.5 models accept a thinking budget, and some can have thinking turned down or off. The names differ, but the idea is the same: a dial between fast and thorough. These settings are guidance, not exact counts. A model given a large budget may use only part of it on an easy question, and effort levels shift behavior rather than fixing a number. Cost is the part people often miss. Reasoning tokens are generally billed as output tokens even when you cannot see them, and output tokens usually cost more than input tokens. A short visible answer can carry a large hidden bill. Latency grows too, since every reasoning token is generated in sequence. More thinking has diminishing returns. On easy or factual lookup questions, extra reasoning rarely improves accuracy and can sometimes lead a model to overcomplicate or second-guess a correct answer. Gains are largest on problems that genuinely need several steps. A common misconception is that the highest setting is always best. The practical approach is to test your own tasks at several levels and pick the lowest one that meets your quality bar.