Dive into the Future: Exploring the Intersection of AI and Economics
This lecture series delves into the cutting edge of artificial intelligence (AI) and its applications within the field of economics. Prepare to explore groundbreaking topics in the exciting world of AI and economics. I. Algorithmic Collusion by Large Language Models The rise of algorithmic pricing raises concerns of algorithmic collusion. We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs), and specifically GPT-4. We find that (1) LLM-based agents are adept at pricing tasks, (2) LLM-based pricing agents autonomously collude in oligopoly settings to the detriment of consumers, and (3) variation in seemingly innocuous phrases in LLM instructions (“prompts”) may increase collusion. These results extend to auction settings. Our findings underscore the need for antitrust regulation regarding algorithmic pricing, and uncover regulatory challenges unique to LLM-based pricing agents. Via arXiv II. Generative AI for Economic Research: Use Cases and Impl
