Can Generative AI agents behave like humans? Evidence from laboratory market experiments

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We explore the potential of Large Language Models (LLMs) to replicate human behavior in economic market experiments.

• Compared to previous studies, we focus on dynamic feedback between LLM agents: the decisions of each LLM impact the market price at the current step, and so affect the decisions of the other LLMs at the next step.
• We compare LLM behavior to market dynamics observed in laboratory settings and assess their alignment with human participants' behavior.
• Our findings indicate that LLMs do not adhere strictly to rational expectations, displaying instead bounded rationality, similarly to human participants.