Computational Economics in Large Language Models: Exploring Model Behavior and Incentive Design under Resource Constraints

Large language models (LLMs) are limited by substantial computational cost. We introduce a "computational economics" framework that treats an LLM as an internal economy of resource-constrained agents (attention heads and neuron blocks) that must allocate scarce computation to maximize task utility. First, we show empirically that when computation is scarce, standard LLMs reallocate attention toward high-value tokens while preserving accuracy. Building on this observation, we propose an incentive-driven training paradigm that augments the task loss with a differentiable computation cost term, encouraging sparse and efficient activations. On GLUE (MNLI, STS-B, CoLA) and WikiText-103, the method yields a family of models that trace a Pareto frontier and consistently dominate post-hoc pruning; for a similar accuracy we obtain roughly a forty percent reduction in FLOPS and lower latency, together with more interpretable attention patterns. These results indicate that economic principles offer a principled route to designing efficient, adaptive, and more transparent LLMs under strict resource constraints.

Publication Details

Journal
ArXiv.org
Published
2025-08-14
Primary Topic
Artificial Intelligence in Healthcare and Education
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article
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article

Computational Economics in Large Language Models: Exploring Model Behavior and Incentive Design under Resource Constraints

ArXiv.org
Artificial Intelligence in Healthcare and Education
article

Computational Economics in Large Language Models: Exploring Model Behavior and Incentive Design under Resource Constraints

article en

Abstract

Large language models (LLMs) are limited by substantial computational cost. We introduce a "computational economics" framework that treats an LLM as an internal economy of resource-constrained agents (attention heads and neuron blocks) that must allocate scarce computation to maximize task utility. First, we show empirically that when computation is scarce, standard LLMs reallocate attention toward high-value tokens while preserving accuracy. Building on this observation, we propose an incentive-driven training paradigm that augments the task loss with a differentiable computation cost term, encouraging sparse and efficient activations. On GLUE (MNLI, STS-B, CoLA) and WikiText-103, the method yields a family of models that trace a Pareto frontier and consistently dominate post-hoc pruning; for a similar accuracy we obtain roughly a forty percent reduction in FLOPS and lower latency, together with more interpretable attention patterns. These results indicate that economic principles offer a principled route to designing efficient, adaptive, and more transparent LLMs under strict resource constraints.

ArXiv.org
Decent work and economic growth
Openalex Percentile: Top 54%
Artificial Intelligence in Healthcare and Education
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