Game of Thoughts: Iterative Reasoning in Game-Theoretic Domains with Large Language Models

We explore the strategic reasoning capabilities of large language models (LLMs). We first show that naively allowing LLMs to select actions in games can lead to sub-optimal and easily exploitable strategies. To address this limitation we propose several algorithms that guide LLMs to iteratively refine their action choices by simulating game outcomes in self-play, akin to cognitive hierarchy models used to characterize human thought processes in strategic settings. Our empirical results in several prominent resource allocation and auction settings indicate that our approach produces stronger and less exploitable strategies. Hence, emulating human decision-making models can enable us to improve the reasoning capabilities of LLMs in multiagent interactions.