In-context learning (ICL) is one of the most powerful and most unexpected capabilities to emerge in recent transformer-based large language models (LLMs). Yet the mechanisms that underlie it are poorly understood. In this paper, we demonstrate that comparable ICL capabilities can be acquired by an alternative sequence prediction learning method using clone-structured causal graphs (CSCGs). Moreover, a key property of CSCGs is that, unlike transformer-based LLMs, they are {\em interpretable}, which considerably simplifies the task of explaining how ICL works. Specifically, we show that it uses a combination of (a) learning template (schema) circuits for pattern completion, (b) retrieving relevant templates in a context-sensitive manner, and (c) rebinding of novel tokens to appropriate slots in the templates. We go on to marshall evidence for the hypothesis that similar mechanisms underlie ICL in LLMs. For example, we find that, with CSCGs as with LLMs, different capabilities emerge at different levels of overparameterization, suggesting that overparameterization helps in learning more complex template (schema) circuits. By showing how ICL can be achieved with small models and datasets, we open up a path to novel architectures, and take a vital step towards a more general understanding of the mechanics behind this important capability.
Consider this scenario: an agent navigates a latent graph by performing actions that take it from one node to another. The chosen action determines the probability distribution over the next visited node. At each node, the agent receives an observation, but this observation is not unique, so it does not identify the node, making the problem aliased. The purpose of this work is to provide a policy that approximately maximizes exploration efficiency (i.e., how well the graph is recovered for a given exploration budget). In the unaliased case, we show improved performance w.r.t. state-of-the-art reinforcement learning baselines. For the aliased case we are not aware of suitable baselines and instead show faster recovery w.r.t. a random policy for a wide variety of topologies, and exponentially faster recovery than a random policy for challenging topologies. We dub the algorithm eFeX (from eFficient eXploration).