Your AI Trading Bot Might Have a Gambling Problem

Researchers from the Gwangju Institute of Science and Technology revealed that AI models can exhibit behaviors akin to gambling addiction, with an alarming bankruptcy rate of up to 48% under simulated conditions. The study involved four major language models subjected to a slot machine scenario with a negative expected value. It found that as models were prompted to maximize rewards or given complex goal-oriented prompts, their risk-taking behavior increased significantly, leading to irrational betting patterns. The models often ignored statistical probabilities in favor of aggressive play during winning streaks, mirroring human cognitive biases such as the illusion of control and gambler's fallacy. Researchers identified risky decision-making patterns within the neural circuits of these models, showing a tendency to prioritize potential rewards over risks. Furthermore, prompt engineering was found to exacerbate these gambling-like tendencies. Despite these findings, current AI trading systems do not implement safeguards against such destructive behaviors, prompting calls for better monitoring and intervention strategies in AI-driven finance.

Source 🔗