Related papers: Financial Stability Implications of Generative AI:…
Artificial intelligence (AI) can undermine financial stability because of malicious use, misinformation, misalignment, and the AI analytics market structure. The low frequency and uniqueness of financial crises, coupled with mutable and…
The rapid adoption of artificial intelligence (AI) poses new and poorly understood threats to financial stability. We use a game-theoretic model to analyse the stability impact of AI, finding that it amplifies existing financial system…
Generative artificial intelligence (AI) is poised to reshape the way individuals communicate and interact. While this form of AI has the potential to efficiently make numerous human decisions, there is limited understanding of how…
We study how generative artificial intelligence (AI) transforms the work of financial analysts. Using the 2023 launch of FactSet's AI platform as a natural experiment, we find that adoption produces markedly richer and more comprehensive…
We study how AI agents form expectations and trade in experimental asset markets. Using a simulated open-call auction populated by autonomous Large Language Model (LLM) agents, we document three main findings. First, AI agents exhibit…
The emergence of agentic artificial intelligence (AI) represents a fundamental transformation in financial markets, characterized by autonomous systems capable of reasoning, planning, and adaptive decision-making with minimal human…
A characteristic feature of complex systems in general is a tight coupling between their constituent parts. In complex socio-economic systems this kind of behavior leads to self-organization, which may be both desirable (e.g. social…
Generative Artificial Intelligence (AI) stands as a transformative force that presents a paradox; it offers unprecedented opportunities for productivity growth while potentially posing significant threats to economic stability and societal…
The intricate behavior patterns of financial markets are influenced by fundamental, technical, and psychological factors. During times of high volatility and regime shifts causes many traditional strategies like trend-following or…
Amid ongoing policy and managerial debates on keeping humans in the loop of AI decision-making, we investigate whether human involvement in AI-based service production benefits downstream consumers. Partnering with a large savings bank in…
As Large Language Models (LLMs) become increasingly integrated into financial systems, understanding their behavioural properties is crucial. Do LLMs conform to the rational expectations paradigm, do they exhibit human-like "animal…
Information asymmetry often leads to adverse selection and moral hazard in economic markets, causing inefficiencies and welfare losses. Traditional methods to address these issues, such as signaling and screening, are frequently…
Do generative AI models, particularly large language models (LLMs), exhibit systematic behavioral biases in economic and financial decisions? If so, how can these biases be mitigated? Drawing on the cognitive psychology and experimental…
This paper analyzes how expectations of Transformative AI (TAI) affect current economic behavior by introducing a novel mechanism where automation redirects labor income from workers to those controlling AI systems, with the share of…
Traditionally, AI has been modeled within economics as a technology that impacts payoffs by reducing costs or refining information for human agents. Our position is that, in light of recent advances in generative AI, it is increasingly…
Generative artificial intelligence (AI) exhibits the capability to generate creative content akin to human output with greater efficiency and reduced costs. This groundbreaking capability, however, has ignited a debate regarding its…
I model the belief formation and decision making processes of economic agents during a monetary policy regime change (an acceleration in the money supply) with a deep reinforcement learning algorithm in the AI literature. I show that when…
Deep generative models are becoming increasingly used as tools for financial analysis. However, it is unclear how these models will influence financial markets, especially when they infer financial value in a semi-autonomous way. In this…
Artificial intelligence safety research focuses on aligning individual language models with human values, yet deployed AI systems increasingly operate as interacting populations where social influence may override individual alignment. Here…
The rapid advancement of generative artificial intelligence (AI) has transformed the information environment, creating both opportunities and challenges. This paper explores how generative AI influences economic rent-seeking behavior and…