The Perception, Reasoning, Action, and Observation (PRAO) cycle, also known as the agentic loop, is the fundamental process that enables an agent to operate autonomously. The four phases are:

  1. Perception: The model reads its context window to gather information.
  2. Reasoning: It evaluates the information to decide on the best course of action.
  3. Action: It emits a structured tool call to perform a task.
  4. Observation: It receives and integrates the results of the action back into its context.

Why it matters: This continuous cycle allows the agent to dynamically adapt its behavior based on new information and feedback from its environment.

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