🤖 Simulated Marketplace - LLM-Powered Freelance Market Simulation

A reproducible framework for studying emergent economic behavior with LLM agents in synthetic marketplaces

🎯 Overview

A research framework that treats LLMs as bounded policy approximators in a controlled marketplace environment. Study how cognitive architectures shape economic outcomes through systematic experimentation with freelancer and client agents.

Key Research Capabilities

• 🧠 Strategic Decision-Making: LLM agents develop bidding strategies through natural language reasoning
• 📈 Market Dynamics: Track competition, efficiency, and inequality patterns over time
• 🎭 Behavioral Adaptation: Agents learn and adapt through reflection mechanisms
• 📊 Controlled Experiments: Systematic comparison of agent configurations (LLM vs Random vs Hybrid)
• 🔬 Reproducible Results: Complete framework available as open-source software

🚀 Quick Start

Prerequisites

• Python 3.8+
• OpenAI API key or custom LLM endpoint

Installation

git clone [REPOSITORY_URL]
cd simulated_marketplace
python -m venv venv
source venv/bin/activate  # On Windows: venv\Scripts\activate
pip install -r requirements.txt

Configuration

# Option A: Environment variable
export OPENAI_API_KEY='sk-your-key-here'

# Option B: Configuration file
cp config/private_config.example.py config/private_config.py
# Edit with your API credentials

Run Simulation

# Test your connection
python test_llm_connection.py

# Run basic simulation
python run_marketplace.py --freelancers 20 --clients 5 --rounds 50

# Analyze results
python analyze_marketplace.py --simulation-file results/your_simulation.json

🏗️ Framework Architecture

Core Components

Simulation Engine

• TrueGPTMarketplace: Main simulation with LLM-powered agents
• SimpleReputationManager: Multi-tier reputation system (New → Established → Expert → Elite)
• JobRankingCalculator: Semantic skill matching and job scoring

Agent Types

• LLM Agents: Strategic reasoning through structured prompts
• Random Agents: Probabilistic baseline (50% bid chance)
• Greedy Agents: Simple rational heuristics (highest budget preference)

Analysis Tools

• MarketplaceAnalysis: Comprehensive metrics and visualizations
• Statistical validation with confidence intervals
• Temporal trend analysis and adaptation tracking

Key Features

✅ Controlled Experimentation

• Fixed population size for systematic comparison
• Configurable parameters (bid limits, reflection rates, cooldown periods)
• Multiple baseline agents for rigorous benchmarking

✅ Advanced Reputation System

• Performance-based tier progression
• Historical reputation tracking across rounds
• Reputation-aware decision making in agent prompts

✅ Market Mechanics

• Fixed-budget bidding (no rate negotiation)
• Natural skill distribution across job categories
• Bid cooloff system enabling re-bidding after N rounds
• Dynamic budget adjustments by clients

✅ Type Safety & Validation

• Pydantic models for all LLM responses (8 distinct types)
• Comprehensive error handling and logging
• 174+ automated tests with baseline agent validation

📊 Research Applications

Comparative Studies

# Compare agent reasoning capabilities
python run_marketplace.py --baseline-scenario random     # Noise baseline
python run_marketplace.py --baseline-scenario greedy     # Rational baseline  
python run_marketplace.py                                # Full LLM agents

# Study reflection mechanisms
python run_marketplace.py --reflection-probability 0.0   # No reflections
python run_marketplace.py --reflection-probability 0.1   # Low reflection rate

Market Mechanism Studies

# Bid cooloff effects
python run_marketplace.py --bid-cooloff-rounds 0    # No re-bidding
python run_marketplace.py --bid-cooloff-rounds 5    # 5-round cooloff

# Job posting frequency
python run_marketplace.py --job-posting-cooldown-min 1 --job-posting-cooldown-max 3   # High frequency
python run_marketplace.py --job-posting-cooldown-min 5 --job-posting-cooldown-max 15  # Low frequency

Performance Optimization

# Large-scale experiments
python run_marketplace.py --freelancers 200 --clients 30 --rounds 100 --quiet --max-workers 20

# Accelerated progression
python run_marketplace.py --max-active-jobs 5  # Higher freelancer capacity

📈 Key Metrics Tracked

Category	Metrics
Efficiency	Fill rate, bid efficiency, market health score
Competition	Bids per job, participation rate, selectivity
Inequality	Work distribution (Gini coefficient), tier distribution
Adaptation	Reputation progression, reflection patterns, strategy changes
Market Health	Saturation risk, engagement rates, recovery patterns

🔬 Framework Assumptions

The framework makes several key assumptions to enable controlled experimentation:

Market Structure

• Fixed agent population (no entry/exit dynamics)
• Discrete time rounds with synchronous actions
• Binary hiring decisions (one freelancer per job)

Agent Behavior

• LLMs as bounded policy approximators with natural language reasoning
• Perfect memory through reflection system
• Reputation-aware decision making

Economic Model

• Fixed budgets with transparent pricing
• No transaction costs or platform fees
• Automatic job completion (success = True) to avoid evaluation bias

Technical Implementation

• Category-first job generation (business domains assigned to clients)
• Natural skill distribution (organic clustering around popular fields)
• Pure ranking system (no arbitrary threshold cutoffs)

See FRAMEWORK_ASSUMPTIONS.md for complete details

📊 Results & Analysis

All results are saved to results/ directory:

• Raw Data: Complete interaction logs in JSON format
• Analysis Reports: Statistical summaries with confidence intervals
• Visualizations: Publication-ready figures (market trends, agent learning, comparative analysis)
• Reputation Tracking: Historical progression data for longitudinal studies

🧪 Testing & Quality Assurance

Comprehensive testing ensures framework reliability:

# Run full test suite (174+ tests)
python -m pytest

# Test specific components
python -m pytest tests/test_baseline_agents.py      # Baseline agent validation
python -m pytest tests/test_marketplace_integration.py  # Integration tests

🔮 Research Directions

Immediate Extensions

• Cross-model validation (different LLM architectures)
• Human-AI hybrid markets
• Alternative auction mechanisms

Long-term Opportunities

• Real-world platform validation
• Policy implications research
• Large-scale economic ecosystem studies

🤝 Contributing

This research demonstrates AI-driven scientific discovery. Contributions welcome for:

• Extended research methodologies
• Technical improvements and optimizations
• Validation studies and cross-platform testing
• Documentation and tutorial improvements

See CONTRIBUTING.md for detailed guidelines.

📧 Contact

Silvia Terragni
Email: silviaterragni at upwork.com

📜 Citation

If you use this framework in your research, please cite our paper:

@inproceedings{terragni2025simulating,
  title={Simulating Two-Sided Job Marketplaces with AI Agents},
  author={Terragni, Silvia and Nojavanasghari, Behnaz and Yang, Frank and Rabinovich, Andrew},
  booktitle={Open Conference of AI Agents for Science},
  year={2025},
  url={https://openreview.net/forum?id=pjpkEHH5YS}
}

Paper: Simulating Two-Sided Job Marketplaces with AI Agents

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This research was conducted almost entirely by AI agents as part of the Agents4Science 2025 conference exploring AI-generated scientific research. The work represents a novel approach to scientific inquiry where artificial intelligence serves as both researcher and subject.