GT Lab Internal Seminar on March, 20: Dmitirii Dagaev, Sofia Paklina, Petr Parshakov
Title: A Beauty Contest Experiment with Artificial Players
Speakers: Dmitirii Dagaev (HSE Moscow), Sofia Paklina (HSE Perm), Petr Parshakov (HSE Perm)
Date: March 20, 15.00
Venue: Kantemirovskaya 3/1, 5th floor
Time: 15.00
Abstract: A Keynesian beauty contest is a wide class of games of guessing the most popular strategy among other players. In particular, guessing a fraction of a mean of numbers chosen by all players is a classic behavioral experiment designed to test level-𝑘 reasoning patterns among various groups of people. The previous literature reveals that the sophistication level of opponents is an important factor affecting the outcome of the game. Smarter decision makers choose strategies that are closer to theoretical Nash equilibrium and demonstrate faster convergence to equilibrium in iterated contests with information revelation. In the level-𝑘 reasoning framework, the Nash equilibrium is played only by infinitely advanced players, 𝑘 = ∞. We run a series of virtual experiments with an AI player, GPT-4, who plays against various groups of players. We test how advanced is this learning language model compared to human players by replicating some of the classic experiments. It is shown that GPT-4 takes into account the opponents’ level of sophistication and adapts by changing the strategy. Our results contribute to the discussion on the accuracy of modeling human economic agents by artificial intelligence.
We are looking forward to seeing you!