The AI Economist: Taxation policy design via two-level deep multiagent reinforcement learning

Artificial intelligence (AI) and reinforcement learning (RL) have improved many areas but are not yet widely adopted in economic policy design, mechanism design, or economics at large. The AI Economist is a two-level, deep RL framework for policy design in which agents and a social planner coadapt. In particular, the AI Economist uses structured curriculum learning to stabilize the challenging two-level, coadaptive learning problem. We validate this framework in the domain of taxation. In one-step economies, the AI Economist recovers the optimal tax policy of economic theory. In spatiotemporal economies, the AI Economist substantially improves both utilitarian social welfare and the trade-off between equality and productivity over baselines. It does so despite emergent tax-gaming strategies while accounting for emergent labor specialization, agent interactions, and behavioral change. These results demonstrate that two-level, deep RL complements economic theory and unlocks an AI-based approach to designing and understanding economic policy.

Automated summary

Artificial intelligence (AI) and reinforcement learning (RL) have not been widely adopted in economic policy design and economics, but the AI Economist presents a two-level, deep RL framework that complements economic theory and can be used for designing and understanding economic policy. Validated in the domain of taxation, the AI Economist recovers optimal tax policies and improves utilitarian social welfare and the trade-off between equality and productivity. This approach accounts for tax-gaming strategies, labor specialization, agent interactions, and behavioral change.