Risk aversion and GPT-3

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


  • 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.


  • 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.


  • 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.

[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).