Who is More Bayesian: Humans or ChatGPT?

We compare the performance of human and artificially intelligent (AI) decision makers in simple binary classification tasks where the optimal decision rule is given by Bayes Rule. We reanalyze choices of human subjects gathered from laboratory experiments conducted by El-Gamal and Grether and Holt and Smith. We confirm that while overall, Bayes Rule represents the single best model for predicting human choices, subjects are heterogeneous and a significant share of them make suboptimal choices that reflect judgement biases described by Kahneman and Tversky that include the ``representativeness heuristic'' (excessive weight on the evidence from the sample relative to the prior) and ``conservatism'' (excessive weight on the prior relative to the sample). We compare the performance of AI subjects gathered from recent versions of large language models (LLMs) including several versions of ChatGPT. These general-purpose generative AI chatbots are not specifically trained to do well in narrow decision making tasks, but are trained instead as ``language predictors'' using a large corpus of textual data from the web. We show that ChatGPT is also subject to biases that result in suboptimal decisions. However we document a rapid evolution in the performance of ChatGPT from sub-human performance for early versions (ChatGPT 3.5) to superhuman and nearly perfect Bayesian classifications in the latest versions (ChatGPT 4o).

Approximating Auction Equilibria with Reinforcement Learning

Traditional methods for computing equilibria in auctions become computationally intractable as auction complexity increases, particularly in multi-item and dynamic auctions. This paper introduces a self-play based reinforcement learning approach that employs advanced algorithms such as Proximal Policy Optimization and Neural Fictitious Self-Play to approximate Bayes-Nash equilibria. This framework allows for continuous action spaces, high-dimensional information states, and delayed payoffs. Through self-play, these algorithms can learn robust and near-optimal bidding strategies in auctions with known equilibria, including those with symmetric and asymmetric valuations, private and interdependent values, and multi-round auctions.