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GPT has become financially literate: Insights from financial literacy tests of GPT and a preliminary test of how people use it as a source of advice

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  • Niszczota, Paweł
  • Abbas, Sami

Abstract

We assess the ability of GPT–a large language model–to serve as a financial robo-advisor for the masses, by using a financial literacy test. Davinci and ChatGPT based on GPT-3.5 score 66% and 65% on the financial literacy test, respectively, compared to a baseline of 33%. However, ChatGPT based on GPT-4 achieves a near-perfect 99% score, pointing to financial literacy becoming an emergent ability of state-of-the-art models. We use the Judge-Advisor System and a savings dilemma to illustrate how researchers might assess advice-utilization from large language models. We also present a number of directions for future research.

Suggested Citation

  • Niszczota, Paweł & Abbas, Sami, 2023. "GPT has become financially literate: Insights from financial literacy tests of GPT and a preliminary test of how people use it as a source of advice," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007055
    DOI: 10.1016/j.frl.2023.104333
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    Keywords

    Financial literacy; Robo-advice; Financial advice; Advice-utilization; Large language model; ChatGPT;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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