mlsanityData to 14 Oct 2026

Calibrating Behavioral Parameters with Large Language Models

arXiv 2602.01022 ↗First posted 1 Feb 2026econ.GN cs.AI q-fin.ECcited by 0

Not on the map. Why?

Abstract (arXiv)

Behavioral parameters such as loss aversion, herding, and extrapolation are central to asset pricing models but remain difficult to measure reliably. We develop a framework that treats large language models (LLMs) as calibrated measurement instruments for behavioral parameters. Using four models and 24{,}000 agent--scenario pairs, we document systematic rationality bias in baseline LLM behavior, including attenuated loss aversion, weak herding, and near-zero disposition effects relative to human benchmarks. Profile-based calibration induces large, stable, and theoretically coherent shifts in several parameters, with calibrated loss aversion, herding, extrapolation, and anchoring reaching or exceeding benchmark magnitudes. To assess external validity, we embed calibrated parameters in an agent-based asset pricing model, where calibrated extrapolation generates short-horizon momentum and long-horizon reversal patterns consistent with empirical evidence. Our results establish measurement ranges, calibration functions, and explicit boundaries for eight canonical behavioral biases.

Key facts. No citing papers in the map yet (data through 14 Oct 2026). Builds on 3 of its 39 references that are in the map. First posted on arXiv 1 Feb 2026.

Builds on

3 of 39 references.

References · 3

  1. 2023Generative Agents: Interactive Simulacra of Human Behaviorcited by 3,568
  2. 2022Out of One, Many: Using Language Models to Simulate Human Samplescited by 752
  3. 2022Using Large Language Models to Simulate Multiple Humans and Replicate Human Subject Studiescited by 515

Built on by

Not cited yet.