Associative learning--forming links between co-occurring items--is fundamental to human cognition, reshaping internal representations in complex ways. Testing hypotheses on how representational changes occur in biological systems is challenging, but large language models (LLMs) offer a scalable alternative. Building on LLMs' in-context learning, we adapt a cognitive neuroscience associative learning paradigm and investigate how representations evolve across six models. Our initial findings reveal a non-monotonic pattern consistent with the Non-Monotonic Plasticity Hypothesis, with moderately similar items differentiating after learning. Leveraging the controllability of LLMs, we further show that this differentiation is modulated by the overlap of associated items with the broader vocabulary--a factor we term vocabulary interference, capturing how new associations compete with prior knowledge. We find that higher vocabulary interference amplifies differentiation, suggesting that representational change is influenced by both item similarity and global competition. Our findings position LLMs not only as powerful tools for studying representational dynamics in human-like learning systems, but also as accessible and general computational models for generating new hypotheses about the principles underlying memory reorganization in the brain.
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