How Strategic Agents Respond: Comparing Analytical Models with LLM-Generated Responses in Strategic Classification

• URL: http://arxiv.org/abs/2501.16355v1
• Date: Mon, 20 Jan 2025 01:39:03 GMT
• Title: How Strategic Agents Respond: Comparing Analytical Models with LLM-Generated Responses in Strategic Classification
• Authors: Tian Xie, Pavan Rauch, Xueru Zhang,
• Abstract summary: We propose using strategic advice generated by large language models to simulate human agent responses in Strategic Classification.<n>We examine five critical SC scenarios -- hiring, loan applications, school admissions, personal income, and public assistance programs.<n>We then compare the resulting agent responses with the best responses generated by existing theoretical models.
• Score: 9.296248945826084
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: When machine learning (ML) algorithms are used to automate human-related decisions, human agents may gain knowledge of the decision policy and behave strategically to obtain desirable outcomes. Strategic Classification (SC) has been proposed to address the interplay between agents and decision-makers. Prior work on SC has relied on assumptions that agents are perfectly or approximately rational, responding to decision policies by maximizing their utilities. Verifying these assumptions is challenging due to the difficulty of collecting real-world agent responses. Meanwhile, the growing adoption of large language models (LLMs) makes it increasingly likely that human agents in SC settings will seek advice from these tools. We propose using strategic advice generated by LLMs to simulate human agent responses in SC. Specifically, we examine five critical SC scenarios -- hiring, loan applications, school admissions, personal income, and public assistance programs -- and simulate how human agents with diverse profiles seek advice from LLMs. We then compare the resulting agent responses with the best responses generated by existing theoretical models. Our findings reveal that: (i) LLMs and theoretical models generally lead to agent score or qualification changes in the same direction across most settings, with both achieving similar levels of fairness; (ii) state-of-the-art commercial LLMs (e.g., GPT-3.5, GPT-4) consistently provide helpful suggestions, though these suggestions typically do not result in maximal score or qualification improvements; and (iii) LLMs tend to produce more diverse agent responses, often favoring more balanced effort allocation strategies. These results suggest that theoretical models align with LLMs to some extent and that leveraging LLMs to simulate more realistic agent responses offers a promising approach to designing trustworthy ML systems.

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