In-Context Learning in Large Language Models Learns Label Relationships but Is Not Conventional Learning

The performance of Large Language Models (LLMs) on downstream tasks often improves significantly when including examples of the input-label relationship in the context. However, there is currently no consensus about how this in-context learning (ICL) ability of LLMs works: for example, while Xie et al. (2021) liken ICL to a general-purpose learning algorithm, Min et al. (2022b) argue ICL does not even learn label relationships from in-context examples. In this paper, we study (1) how labels of in-context examples affect predictions, (2) how label relationships learned during pre-training interact with input-label examples provided in-context, and (3) how ICL aggregates label information across in-context examples. Our findings suggests LLMs usually incorporate information from in-context labels, but that pre-training and in-context label relationships are treated differently, and that the model does not consider all in-context information equally. Our results give insights into understanding and aligning LLM behavior.