Industry
Adaptive Bandit Algorithms for Contextual Matching Markets
Lin, Shiyun, Mauras, Simon, Perchet, Vianney, Merlis, Nadav
We study bandit learning in matching markets, where players and arms constitute the two market sides, and the players' utilities are linear in the arm contexts. In each round, new arms arrive with observable contexts. Then, the algorithm matches them to players, aiming to minimize each player's regret against a stable matching benchmark. This contextual structure creates significant complexity: subtle context shifts can slightly alter one player's utility while completely reconfiguring the underlying benchmark, causing large regret spikes for others. We address this in two settings: stochastic contexts, drawn from a latent distribution, and adversarial contexts, which may be arbitrary. For the stochastic case, we introduce a novel minimum preference gap to capture learning difficulty and provide a fully adaptive algorithm with an instance-dependent poly-logarithmic regret upper bound. We also establish matching instance-independent regret upper and lower bounds under a mild distributional assumption. For the adversarial setting, we propose a tractable regret notion that remains valid under arbitrary contexts and achieves an instance-independent sublinear regret bound via an adaptive algorithm.
Insurance Pricing Optimization via Off-Policy Evaluation
Günther, Sascha, Semenovich, Dimitri, Wüthrich, Mario V.
Traditional insurance pricing relies on risk-based principles that ensure actuarial fairness and solvency but do not explicitly account for policyholders' price sensitivity. We formulate insurance pricing as a decision-making problem and study it using tools from off-policy evaluation and stochastic control. We propose a kernelized inverse propensity score estimator that exploits local structure in the action space and yields variance reduction compared to the classical inverse propensity score estimator. Building on these value estimates, we investigate policy optimization and present two practical approaches for computing optimal pricing rules: an interpretable data-shared Lasso formulation and a flexible policy parameterization based on neural networks. Using a controlled synthetic travel insurance environment, we empirically confirm the theoretical results and show that neural networks outperform existing techniques for policy optimization.
Decision-focused learning for optimal PV-Battery scheduling
Depoortere, Joris, Kazmi, Hussain, Driesen, Johan
The use of residential photovoltaics has increased dramatically in recent years. With battery systems becoming more affordable, the optimal operation of a photovoltaic-battery system can bring significant savings to households. Optimal control requires correct forecasts of underlying parameters, such as photovoltaic power generation, to schedule the battery. While forecasting models have become increasingly accurate due to algorithmic advances and data availability, accuracy is typically measured in generic metrics which might not align with the downstream application. This study proposes a decision-focused learning framework that integrates optimization and prediction by training a Long Short-Term Memory photovoltaic energy forecaster on the downstream optimal scheduling of a battery system. The proposed methodology is compared against a standard two-phase approach. Across a 14-month evaluation period, the decision-focused method reduced average electricity costs across twenty buildings by 3.6% when normalized against performance bounds defined by a perfect forecast and a baseline of no optimization. Critically, this financial improvement was achieved despite the model exhibiting a root mean squared error of 19.9%, significantly higher than the decoupled model's 8.2%. Warm-starting the decision-focused model further improves results, lowering average cost by approximately 8%, while also mitigating the negative impact on statistical accuracy (root mean squared error of 13.7%). The findings are statistically significant at the 0.001 level across the twenty households and for each household individually. These results demonstrate that aligning forecast models with optimization goals is key for achieving cost advantages in PV-battery systems. Future research should replicate these findings on other datasets, alternate forecasting models and alternate optimization algorithms.
Latent Diffusion for Missing Data
Estad, Alberte Heering, Peis, Ignacio, Frellsen, Jes
Diffusion models have emerged as powerful generative approaches for missing-data imputation, yet most existing methods operate directly in data space and degrade when training data are heavily incomplete. We investigate whether shifting diffusion to a learned latent representation improves robustness under missing-completely-at-random (MCAR) corruption. To this end, we propose a two-stage framework: a robust VAE-based imputer first learns compact semantic features from incomplete observations, and a diffusion model is then trained in the resulting latent space. Across training missing rates, we perform a controlled comparison against pixel-space diffusion models under the same incomplete-data setting. The latent diffusion model maintains high sample quality and remains stable up to 50\% missingness, while pixel-space diffusion degrades progressively as missingness increases. For downstream imputation, latent diffusion also achieves consistently better performance than pixel-space diffusion. These findings indicate that latent-space modeling mitigates artifact amplification from zero-imputed inputs and provides a more robust generative prior for incomplete-data learning. Overall, our results support latent diffusion as a strong and practically useful alternative to pixel-space diffusion for missing-data problems.
Conservative neural posterior estimation via distributionally robust training
Laplante, William, Hikida, Yuga, Dellaporta, Charita, Briol, François-Xavier, Bharti, Ayush
Simulation-based inference (SBI; Cranmer et al., 2020) is a powerful framework for inferring parameters of scientific models whose likelihood functions are unavailable or computationally prohibitive to evaluate, but for which simulating data is straightforward. The use of flexible neural conditional density estimators has substantially expanded the applicability of SBI to challenging problems, especially in fields such as particle physics (Brehmer, 2021), cognitive neuroscience (Fengler et al., 2021), economics (Dyer et al., 2024) and cosmology (Alsing et al., 2018; Jeffrey et al., 2021). Neural SBI methods rely on simulations from the scientific model to approximate intractable quantities such as the posterior, the likelihood, the likelihood-to-evidence ratio, or the score function; see Zammit-Mangion et al. (2024) for a recent review. In this work, we focus on the widely used neural posterior estimation (NPE) method (Papamakarios and Murray, 2016; Radev et al., 2022). A central practical limitation of NPE is the simulation budget required to train the conditional density estimator. As many scientific simulators are expensive to run, generating a sufficiently large training set is often the main computational bottleneck.
Deep Neural Networks for Doubly Robust Estimation with Nonprobability Survey Samples
Dai, Yufang, Luo, Shihua, Lou, Wendy, Wang, Zilin, Lu, Xuewen
Integrating probability and nonprobability survey samples is an important problem in modern survey sampling. Nonprobability samples often contain rich outcome information but may lack population representativeness, whereas probability samples provide design-based auxiliary information but may not contain the study variable. We propose a deep neural network (DNN)-assisted doubly robust framework for estimating the finite population mean from these two data sources. The proposed method models the logit sampling score for the nonprobability sample as an unknown nonparametric function and estimates it by maximizing a pseudo-likelihood that combines information from the nonprobability sample and a reference probability sample. The DNN parameters are optimized using the ADAM algorithm. The resulting DNN-estimated sampling scores are incorporated into a DNN-assisted inverse-probability weighted estimator and a deep doubly robust estimator. We establish consistency and convergence rates under regularity conditions and evaluate the finite-sample performance of the proposed estimators through simulation studies and an empirical application using Pew Research Center and Behavioral Risk Factor Surveillance System data. The results suggest that the proposed estimators can improve robustness to parametric propensity-score misspecification, especially when the true selection mechanism is nonlinear.
The General Theory of Localization Methods
This paper proposes a general machine learning framework called the localization method, which is fundamentally built on two core concepts: localization kernels and local means -- key components that underpin the self-attention mechanism. To establish a rigorous theoretical foundation, the framework is formally defined through two essential pillars: the formulation of the local(-ized) model and the localization trick. We systematically investigate the connections between the localization method and a wide range of existing machine learning models/methods, including (but not limited to) kernel methods, lazy learning, the MeanShift algorithm, relaxation labeling, Hopfield networks, local linear embedding (LLE), fuzzy inference, and denoising autoencoders (DAEs). By dissecting these relationships, we clarify the broader theoretical significance of the localization method and demonstrate its practical applicability across diverse machine learning tasks. Furthermore, we explore advanced extensions of the framework, such as adaptive kernels, hierarchical local models, and non-local models. Notably, we show that the Transformer -- a cornerstone of modern sequence modeling -- can be constructed using hierarchical local models, revealing the ability of the localization method to unify and generalize state-of-the-art architectures. This work not only provides a unified theoretical lens to reinterpret existing models but also offers new methodological tools for designing flexible, data-adaptive learning systems.
We analysed thousands of Trump's posts - here's what we found
We analysed thousands of Trump's posts - here's what we found In 2026, Donald Trump's use of social media has escalated. The BBC sifted through thousands of posts on his platform Truth Social to analyse what the President has been saying and when. What was the busiest day? When are the busiest hours? What type of content does President Trump share?
Paul McCartney on playing guitar with Paul Mescal: 'He knew it better than I did!'
Paul McCartney on playing guitar with Paul Mescal: 'He knew it better than I did!' Hey, I know you! exclaims Paul McCartney, gripping my hand as we walk into his office in central London. And while I'm realistic enough to know he doesn't really hold treasured memories of our previous encounters, I'm impressed by his ability to defuse the tension of Meeting A Beatle. We gather in Soho at lunchtime. Instead of Wild Honey Pie or Savoy Truffle, McCartney has opted for a simple bagel (topping: a terrifying blend of Marmite and hummus), which he prepared in a kitchenette next to his assistant's desk. As he eats, he scans a printed list of film titles - mainly vintage comedies - looking for something to play at his family movie night.
Google Security Engineer Arrested in Million-Dollar Polymarket Trading Scheme
According to federal prosecutors, Michele Spagnuolo made more than $1 million on the prediction market platform using confidential information about Google Search traffic. A Google security engineer has been charged with crimes stemming from allegedly placing trades on Polymarket using confidential internal information from the tech giant. Michele Spagnuolo, a 36-year-old Italian citizen, was arrested this morning in New York, as first reported by ABC News. Spagnuolo is charged with one count each of commodities fraud, wire fraud, and money laundering. He has worked at Google since 2014 and was based out of the company's Zurich, Switzerland, offices.