MAGE: Understanding Stability-Performance Trade-offs in Multi-component Prompt Optimization

How do different components of iterative prompt optimization interact, and what happens when they are combined? We investigate this through MAGE (Memory-Augmented Goal-directed Prompt Evolution), a controlled analysis framework for studying component interaction in prompt optimization. MAGE is not proposed as a superior optimizer in absolute terms; it integrates episodic memory, multi-objective Pareto selection, and adaptive evaluation as a platform for controlled ablation. Our experiments uncover a previously unreported phenomenon, the Prompt Optimization Coupling Effect (POCE): when multiple stochastic optimization signals operate within a closed reflective loop, they interact in ways that simultaneously improve performance and amplify variance, behavior that cannot be predicted by analyzing components in isolation. Three main findings emerge. First, failure-grounded reflection is essential: methods relying only on scores (OPRO) or abstract critique (Self-Refine) fail to improve prompts. Second, MAGE achieves 46.4% versus GEPA's 34.0% on GSM8K-Hard (+12.4%, P(MAGE>GEPA)=0.998, 5 seeds on gpt-4o-mini), with comparable variance (7.3% vs. 7.0%). Third, increasing candidate diversity reveals the clearest POCE signal: expanding the candidate pool from n=3 to n=5 improves mean accuracy by +21.6% while increasing variance by 3.7x. We further validate on Llama 3.1 8B and show POCE is headroom-dependent: when the base model already achieves high accuracy, variance amplification disappears. Finally, in low-data regimes (Ntrain=30), well-designed fixed prompts outperform all reflective optimizers, indicating that scaffold choice dominates optimizer choice. Our results suggest prompt optimization systems behave as coupled stochastic processes and should be evaluated in terms of both performance and stability, not just peak accuracy.