Papers/2610.33103
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Prospect Theory in Large Language Models: A Meta-Analysis of Loss Aversion, Diminishing Sensitivity, and Probability Weighting

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probability weightingloss aversionlanguage models
2610.33103
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Abstract

This paper examines whether Large Language Models (LLMs) exhibit properties of prospect theory, revealing modest loss aversion and diminishing sensitivity, but retaining human-like probability distortion.

Reality Card

Core Claim

LLMs show little loss aversion and diminishing sensitivity compared to humans, but exhibit human-like probability distortion.

Method / Result

Pooled loss aversion $BB$ is 1.26, significantly lower than the strongest human estimate of 1.96.

Limitations

The findings may vary significantly based on specific model families and fitting methods.

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