arXiv AI

Predicting Effects, Missing Distributions: Evaluating LLMs as Human Behavior Simulators in Operations Management

arXiv:2510. 03310v2 Announce Type: replace-cross Abstract: Large language models (LLMs) are increasingly used to simulate human behavior in business, economics, and the social sciences, offering a low-cost complement to laboratory experiments, field studies, and surveys.

arXiv Machine Learning
Sep 14

Aligning Language Models with Observational Data: Opportunities and Risks from a Causal Perspective

The paper discusses how large language models (LLMs) can be fine‑tuned with observational data to improve alignment with human preferences and business goals. It highlights that directly using such data can cause models to learn spurious correlations, and introduces DeconfoundLM, a method that removes known confounders from reward signals. Experiments show that DeconfoundLM better recovers causal relationships and outperforms baseline methods by over 16% in objective score when confounding is present.

By Erfan Loghmani
arXiv AI
Sep 15

Are LLMs Good Financial User Simulators? A Preliminary Study

Large language models (LLMs) are being tested as simulators of individual financial decision-making. In a controlled paper‑trading experiment with 120 volunteers, the study evaluated whether an LLM could predict a participant’s next‑day trading action, chosen security, and transaction size using only pre‑cutoff information. Results showed that including market context improved predictions of actions and tickers, but sizing remained challenging, and the models tended to over‑predict hold actions, under‑predict sells, and simplify multi‑security trades.

By Jiajie He, Jiangyuan Hong, Dongling Ni, Wenjin Liu, Xintong Chen