AI Insiders

Can ChatGPT Overcome Behavioral Biases in the Financial Sector?


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Imagine you're trying to decide how to spend or save your pocket money. Sometimes, the way someone tells you about something can change how you feel about it - just like how a boring vegetable might sound tastier if it's described in a fun way! This is called the "framing effect."
Now, scientists are trying to teach a smart computer program (called ChatGPT) to make better decisions about money, especially when it comes to buying and selling gold. Here's what they did:
The Problem:
People (and computers) sometimes make quick decisions based on how information sounds
They might get too excited about good news or too worried about bad news
This can lead to not-so-smart choices with money
The Solution - A Special Three-Step Plan:
First: Sort the news into different groups (like sorting your toys into different boxes)
Second: Give each piece of news a score (like rating games out of 10)
Third: Think about it again carefully (like when your parents tell you to "think twice")
How It Works:
It's like having a super-smart friend who:
Doesn't get too excited by flashy news
Thinks about the long-term (not just right now)
Double-checks its decisions to make sure they're smart
The Results:
This new way of thinking helped the computer make better money decisions
It did better than just buying and keeping gold
It was smarter than simpler ways of making decisions
Think of it like teaching a computer to be a wise money manager - one that doesn't get tricked by how things sound and always takes time to think carefully before making decisions!
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AI InsidersBy Ronald Soh