KTO: Model Alignment as Prospect Theoretic Optimization
Quick summary
arXiv:2402.01306v5 Announce Type: replace-cross Abstract: Kahneman & Tversky's $\textit{prospect theory}$ tells us that humans perceive random variables in a biased but well-defined manner (1992); for example, humans are famously loss-averse. We show that objectives for aligning LLMs with human feedback implicitly incorporate many of these biases -- the success of these objectives (e.g., DPO) over cross-entropy minimization can partly be ascribed to them belonging to a family of loss functions that we call $\textit{human-aware losses}$ (HALOs). However, the utility functions these methods attr
Key takeaways
- arXiv:2402.01306v5 Announce Type: replace-cross Abstract: Kahneman & Tversky's $\textit{prospect theory}$ tells us that humans perceive random variables in a biased but well-defined manner (1992); for example, humans are famously loss-averse.
- We show that objectives for aligning LLMs with human feedback implicitly incorporate many of these biases -- the success of these objectives (e.g., DPO) over cross-entropy minimization can partly be ascribed to them belonging to a family of loss functions that we call $\textit{human-aware losses}$ (HALOs).
- However, the utility functions these methods attr
Why it matters
This model development creates a new option for users and a new testing obligation for developers. A fixed evaluation set comparing quality, cost and failure behavior is more useful than launch claims.

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