This post aims to build on the recent work by Binz and Schulz [1]. I did an experiment which looked at the preferences of GPT-3 at tacking a gamble versus some fixed amount (the expected value of the bet with a discount). 

Repo: https://github.com/afiqhatta/gpt_risk_aversion

Question

• Does GPT-3 exhibit risk aversion in the sense of prospect theory? If so, it may not demonstrate the advanced decision-making capabilities we might be looking for. 
• In particular, does GPT-3 favour certainty (perhaps with a discount) instead of gambles? - Knowing might help us measure GPT -3's views on risk-taking. 
  We could apply this knowledge on risk-taking to situations in safety or risk-taking in markets.

Methodology

• Here, we adopt a section of the work of [1], offering GPT-3 a choice between 
  • a gamble of x dollars with a 50% chance of winning, and a 50% chance of getting nothing
  • a certain win of x / 2  dollars with a discount. 
• The notebook below shows the probabilities of selection at different levels of x. The separate lines show a certain choice with a discount, vs a gamble with a discount. 

Results

• GPT-3 seems to show a lot of risk aversion, showing preference 
  even up to an 80% discount. 
• This seems robust to different levels of reward.

References
[1] Binz, Marcel, and Eric Schulz. 2022. "Using Cognitive Psychology to Understand GPT-3." PsyArXiv. June 21. doi:10.31234/osf.io/6dfgk. 

[2] Kahneman, D. Prospect theory: An analysis of decisions under risk. Econometrica 47, 278 (1979).