Understanding LLM Evaluator Behavior: A Structured Multi-Evaluator Framework for Merchant Risk Assessment

Abstract

Large Language Models (LLMs) are increasingly used as evaluators of reasoning quality, yet their reliability and bias in payments-risk settings remain poorly understood. We introduce a structured multi-evaluator framework for assessing LLM reasoning in Merchant Category Code (MCC)-based merchant risk assessment, combining a five-criterion rubric with Monte-Carlo scoring to evaluate rationale quality and evaluator stability. Five frontier LLMs generate and cross-evaluate MCC risk rationales under attributed and anonymized conditions. To establish a judge-independent reference, we introduce a consensus-deviation metric that eliminates circularity by comparing each judge's score to the mean of all other judges, yielding a theoretically grounded measure of self-evaluation and cross-model deviation. Results reveal substantial heterogeneity: GPT-5.1 and Claude 4.5 Sonnet show negative self-evaluation bias (-0.33, -0.31), while Gemini-2.5 Pro and Grok 4 display positive bias (+0.77, +0.71), with bias attenuating by 25.8 percent under anonymization. Evaluation by 26 payment-industry experts shows LLM judges assign scores averaging +0.46 points above human consensus, and that the negative bias of GPT-5.1 and Claude 4.5 Sonnet reflects closer alignment with human judgment. Ground-truth validation using payment-network data shows four models exhibit statistically significant alignment (Spearman rho = 0.56 to 0.77), confirming that the framework captures genuine quality. Overall, the framework provides a replicable basis for evaluating LLM-as-a-judge systems in payment-risk workflows and highlights the need for bias-aware protocols in operational financial settings.