Have a personal or library account? Click to login
Game-theory behaviour of large language models: The case of Keynesian beauty contests Cover

Game-theory behaviour of large language models: The case of Keynesian beauty contests

By: Siting Estee Lu  
Open Access
|Jul 2025

References

  1. Aher, G. V., Arriaga, R. I., & Kalai, A. T. (2023). Using large language models to simulate multiple humans and replicate human subject studies. Proceedings of Machine Learning, 202, 337–371. https://proceedings.mlr.press/v202/aher23a.html
  2. Akata, E., Schulz, L., Coda-Forno, J., Oh, S. J., Bethge, M., & Schulz, E. (2023). Playing repeated games with large language models. https://doi.org/10.48550/arXiv.2305.16867
  3. Argyle, L. P., Busby, E. C., Fulda, N., Gubler, J. R., Rytting, C., & Wingate, D. (2023). Out of one, many: Using language models to simulate human samples. Political Analysis, 31(3), 337–351. https://doi.org/10.1017/pan.2023.2
  4. Bauer, K., Liebich, L., Hinz, O., & Kosfeld, M. (2023). Decoding GPT’s hidden ‘rationality’ of cooperation. SAFE Working Paper, 401. https://doi.org/10.2139/ssrn.4576036
  5. Bosch-Domenech, A., Montalvo, J. G., Nagel, R., & Satorra, A. (2002). One, two,(three), infinity,…: Newspaper and lab beauty-contest experiments. American Economic Review, 92(5), 1687–1701. https://doi.org/10.1257/000282802762024737
  6. Brown, Z. Y., & MacKay, A. (2023). Competition in pricing algorithms. American Economic Journal: Microeconomics, 15(2), 109–156. https://doi.org/10.1257/mic.20210158
  7. Camerer, C. F., Ho, T. H., & Chong, J. K. (2004). A cognitive hierarchy model of games. The Quarterly Journal of Economics, 119(3), 861–898. https://doi.org/10.1162/0033553041502225
  8. Chen, L., Mislove, A., & Wilson, C. (2016). An empirical analysis of algorithmic pricing on Amazon marketplace. Proceedings of the 25th International Conference on World Wide Web, 1339–1349. https://doi.org/10.1145/2872427.2883089
  9. Chen, Y., Liu, T. X., Shan, Y., & Zhong, S. (2023). The emergence of economic rationality of GPT. Proceedings of the National Academy of Sciences, 120(51), e2316205120. https://doi.org/10.1073/pnas.2316205120
  10. Coricelli, G., & Nagel, R. (2009). Neural correlates of depth of strategic reasoning in medial prefrontal cortex. Proceedings of the National Academy of Sciences, 106(23), 9163–9168. https://doi.org/10.1073/pnas.0807721106
  11. Costa-Gomes, M. A., & Weizsäcker, G. (2008). Stated beliefs and play in normal-form games. The Review of Economic Studies, 75(3), 729–762. https://doi.org/10.1111/j.1467-937X.2008.00498.x
  12. Devetag, G., Di Guida, S., & Polonio, L. (2016). An eye-tracking study of feature-based choice in one-shot games. Experimental Economics, 19(1), 177–201. https://doi.org/10.1007/s10683-015-9432-5
  13. Dillion, D., Tandon, N., Gu, Y., & Gray, K. (2023). Can ai language models replace human participants? Trends in Cognitive Sciences, 27(7), 597–600. https://doi.org/10.1016/j.tics.2023.04.008
  14. Fan, C., Chen, J., Jin, Y., & He, H. (2023). Can large language models serve as rational players in game theory? A systematic analysis. https://doi.org/10.48550/arXiv.2312.05488.
  15. Guo, F. (2023). GPT in game theory experiments. https://doi.org/10.48550/arXiv.2305.05516.
  16. Guo, S., Bu, H., Wang, H., Ren, Y., Sui, D., Shang, Y., & Lu, S. (2024). Economics arena for large language models. https://doi.org/10.48550/arXiv.2401.01735.
  17. Hamill, L., & Gilbert, N. (2015). Agent-based modelling in economics. John Wiley & Sons.
  18. Horton, J. J. (2023). Large language models as simulated economic agents: What can we learn from homo silicus? NBER Working Paper, 31122.. https://doi.org/10.3386/w31122
  19. HuggingFace. (2022). Illustrating reinforcement learning from human feedback (RLHF). https://huggingface.co/blog/rlhf
  20. Huijzer, R., & Hill, Y. (2023, January 31). Large language models show human behavior. https://doi.org/10.31234/osf.io/munc9
  21. Ireson, J., & Hallam, S. (1999). Raising standards: Is ability grouping the answer? Oxford Review of Education, 25(3), 343–358. https://doi.org/10.1080/030549899104026
  22. Kalton, G., & Schuman, H. (1982). The effect of the question on survey responses: A review. Journal of the Royal Statistical Society Series A, 145(1), 42–73. https://doi.org/10.2307/2981421
  23. Keynes, J. M. (1936). The general theory of interest, employment and money. Macmillan.
  24. Kosinski, M. (2023). Theory of mind may have spontaneously emerged in large language models. https://www.gsb.stanford.edu/faculty-research/working-papers/theory-mind-may-have-spontaneously-emerged-large-language-models
  25. Liem, G. A. D., Marsh, H. W., Martin, A. J., McInerney, D. M., & Yeung, A. S. (2013). The big-fish-little-pond effect and a national policy of within-school ability streaming: Alternative frames of reference. American Educational Research Journal, 50(2), 326–370. https://doi.org/10.3102/0002831212464511
  26. Mauersberger, F., & Nagel, R. (2018). Levels of reasoning in Keynesian beauty contests: A generative framework. In C. Hommes & B. LeBaron (Eds.), Handbook of computational economics (vol. 4, pp. 541–634). Elsevier. https://doi.org/10.1016/bs.hescom.2018.05.002
  27. Mei, Q., Xie, Y., Yuan, W., & Jackson, M. O. (2024). A Turing test of whether ai chat-bots are behaviorally similar to humans. Proceedings of the National Academy of Sciences, 121(9), e2313925121. https://doi.org/10.1073/pnas.2313925121
  28. Nagel, R. (1995). Unraveling in guessing games: An experimental study. The American Economic Review, 85(5), 1313–1326. https://www.jstor.org/stable/2950991
  29. Nagel, R., Bühren, C., & Frank, B. (2017). Inspired and inspiring: Hervé moulin and the discovery of the beauty contest game. Mathematical Social Sciences, 90, 191–207. https://doi.org/10.1016/j.mathsocsci.2016.09.001
  30. OpenAI. (2024). How ChatGPT and our language models are developed. https://help.openai.com/en/articles/7842364-how-chatgpt-and-our-language-models-are-developed
  31. Ouyang, L., Wu, J., Jiang, X., Almeida, D., Wainwright, C., Mishkin, P., Zhang, C., Agarwal, S., Slama, K., Ray, A., Schulman, J., Hilton, J., Kelton, F., Miller, L., Simens, M., Askell, A., Welinder, P., Christiano, P., Leike, J., & Lowe, R. (2022). Training language models to follow instructions with human feedback. https://proceedings.neu-rips.cc/paper_files/paper/2022/file/b1efde53be364a73914f58805a001731-Paper-Conference.pdf
  32. Phelps, S., & Russell, Y. I. (2023). Investigating emergent goal-like behaviour in large language models using experimental economics. https://doi.org/10.48550/arXiv.2305.07970
  33. Sclar, M., Choi, Y., Tsvetkov, Y., & Suhr, A. (2023). Quantifying language models’ sensitivity to spurious features in prompt design or: How i learned to start worrying about prompt formatting. https://doi.org/10.48550/arXiv.2310.11324
  34. Strachan, J. W. A,. Albergo, D., Borghini, G., Pansardi, O., Scaliti, E., Gupta, S., Saxena, K., Rufo, A., Panzeri, S., Manzi, G., Graziano, M. S. A., & Becchio, C. (2024). Testing theory of mind in large language models and humans. Nature Human Behaviour, 8(7), 1285–1295. https://doi.org/10.1038/s41562-024-01882-z
  35. Trality. (2024). Crypto trading bots: The ultimate beginner’s guide. Retrieved January 23, 2024 from https://medium.com/trality/crypto-trading-bots-f46405a7be11
  36. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458. https://www.jstor.org/stable/1685855
  37. Webb, T., Holyoak, K. J., & Lu, H. (2023). Emergent analogical reasoning in large language models. Nature Human Behaviour, 7(9), 1526–1541. https://doi.org/10.1038/s41562-023-01659-w
DOI: https://doi.org/10.18559/ebr.2025.2.2182 | Journal eISSN: 2450-0097 | Journal ISSN: 2392-1641
Language: English
Page range: 119 - 148
Submitted on: Mar 29, 2025
Accepted on: Jun 9, 2025
Published on: Jul 8, 2025
Published by: Poznań University of Economics and Business Press
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year

© 2025 Siting Estee Lu, published by Poznań University of Economics and Business Press
This work is licensed under the Creative Commons Attribution 4.0 License.