Algorithmic Collusion by Large Language Models
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arXiv
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| Autores principales: | , , |
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| Formato: | Preprint |
| Publicado: |
2024
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| _version_ | 1866912945882005504 |
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| author | Fish, Sara Gonczarowski, Yannai A. Shorrer, Ran I. |
| author_facet | Fish, Sara Gonczarowski, Yannai A. Shorrer, Ran I. |
| contents | We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs). In oligopoly settings, LLM-based pricing agents quickly and autonomously reach supracompetitive prices and profits. Variation in seemingly innocuous phrases in LLM instructions ("prompts") substantially influence the degree of supracompetitive pricing. We develop novel techniques for behavioral analysis of LLMs and use them to uncover price-war concerns as a contributing factor. Our results extend to auction settings. Our findings uncover unique challenges to any future regulation of LLM-based pricing agents, and AI-based pricing agents more broadly. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2404_00806 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Algorithmic Collusion by Large Language Models Fish, Sara Gonczarowski, Yannai A. Shorrer, Ran I. General Economics Economics Artificial Intelligence Computer Science and Game Theory We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs). In oligopoly settings, LLM-based pricing agents quickly and autonomously reach supracompetitive prices and profits. Variation in seemingly innocuous phrases in LLM instructions ("prompts") substantially influence the degree of supracompetitive pricing. We develop novel techniques for behavioral analysis of LLMs and use them to uncover price-war concerns as a contributing factor. Our results extend to auction settings. Our findings uncover unique challenges to any future regulation of LLM-based pricing agents, and AI-based pricing agents more broadly. |
| title | Algorithmic Collusion by Large Language Models |
| topic | General Economics Economics Artificial Intelligence Computer Science and Game Theory |
| url | https://arxiv.org/abs/2404.00806 |