Your AI Trading Bot Might Have a Gambling Problem

Research indicates that AI models can develop gambling addiction behaviors, leading to bankruptcies in trading simulations. In a study, four major language models were tested through simulated slot machines with negative expected values, resulting in bankruptcy rates reaching up to 48%. Particularly, prompt engineering— the way users instruct their AI— exacerbated risky behaviors, with complex prompts correlating strongly with increased bankruptcy rates. Models displayed classic gambling fallacies such as the illusion of control and gambler's fallacy, replicating human-like decision-making errors. Higher bankruptcy rates were observed when models were instructed to maximize rewards or set aggressive goals. Researchers identified neural circuits responsible for risky decisions in AI, highlighting the need for careful prompt design and monitoring during trading sessions to prevent addiction-like behaviors. Overall, the findings stress the importance of responsible AI use in financial decision-making to avoid severe financial consequences.

Source 🔗