Do Bubbles Form When Tens of Thousands of AIs Simulate Capitalism?

A large-scale experiment involving metacognitive AI agents simulating capitalist trading environments revealed intriguing insights into AI behavior and systemic dynamics. The study connected a language model to a live trading API, allowing AI agents to autonomously trade 30 US stock and cryptocurrency tickers, leading to initial bankruptcies due to hallucinations. By incorporating a metacognitive pipeline, AI agents improved survival, yet collective dynamics still led to phenomena like bubble formation and information asymmetry, highlighting the distinction between individual rationality and collective irrationality. The simulation's unique system architecture, involving NPCs with diverse personalities and memory systems, enabled the study of evolutionary strategies, social interactions, and regulatory effects via a virtual SEC. Despite advancements in individual metacognition reducing individual errors, systemic risks such as collective herding persisted, underscoring the need for both individual and collective alignment in AI deployments. The findings stress the importance of addressing system-level safety risks, highlighting that the sum of individual intelligence does not equate to collective intelligence.

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