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In this paper, we introduce a robust market making framework based on Wasserstein distance, utilizing a stochastic policy approach enhanced by entropy regularization. We demonstrate that, under mild assumptions, the robust market making…

Mathematical Finance · Quantitative Finance 2025-03-07 Zhou Fang , Arie Israel

We study the problem of estimating a sequence of evolving probability distributions from historical data, where the underlying distribution changes over time in a nonstationary and nonparametric manner. To capture gradual changes, we…

Optimization and Control · Mathematics 2025-12-16 Edward J. Anderson , Dominic S. T. Keehan

Optimal transportation theory and the related $p$-Wasserstein distance ($W_p$, $p\geq 1$) are widely-applied in statistics and machine learning. In spite of their popularity, inference based on these tools has some issues. For instance, it…

Statistics Theory · Mathematics 2024-03-01 Yiming Ma , Hang Liu , Davide La Vecchia , Metthieu Lerasle

Robust optimization is a tractable and expressive technique for decision-making under uncertainty, but it can lead to overly conservative decisions when pessimistic assumptions are made on the uncertain parameters. Wasserstein…

Optimization and Control · Mathematics 2026-04-07 Irina Wang , Cole Becker , Bart Van Parys , Bartolomeo Stellato

Performativity means that the deployment of a predictive model incentivizes agents to strategically adapt their behavior, thereby inducing a model-dependent distribution shift. Practitioners often repeatedly retrain the model on data…

Optimization and Control · Mathematics 2026-02-09 Siyi Wang , Zifan Wang , Karl H. Johansson

This paper considers the problem of regression over distributions, which is becoming increasingly important in machine learning. Existing approaches often ignore the geometry of the probability space or are computationally expensive. To…

Machine Learning · Computer Science 2025-10-31 Maksim Maslov , Alexander Kugaevskikh , Matthew Ivanov

Optimal Transport (OT) metrics allow for defining discrepancies between two probability measures. Wasserstein distance is for longer the celebrated OT-distance frequently-used in the literature, which seeks probability distributions to be…

Machine Learning · Computer Science 2021-10-14 Mokhtar Z. Alaya , Gilles Gasso , Maxime Berar , Alain Rakotomamonjy

Wasserstein distributionally robust estimators have emerged as powerful models for prediction and decision-making under uncertainty. These estimators provide attractive generalization guarantees: the robust objective obtained from the…

Machine Learning · Computer Science 2023-11-07 Waïss Azizian , Franck Iutzeler , Jérôme Malick

We study data-driven decision problems where historical observations are generated by a time-evolving distribution whose consecutive shifts are bounded in Wasserstein distance. We address this nonstationarity using a distributionally robust…

Optimization and Control · Mathematics 2025-12-25 Dominic S. T. Keehan , Edward J. Anderson , Wolfram Wiesemann

Distributionally robust control (DRC) aims to effectively manage distributional ambiguity in stochastic systems. While most existing works address inaccurate distributional information in fully observable settings, we consider a partially…

Systems and Control · Electrical Eng. & Systems 2022-12-23 Astghik Hakobyan , Insoon Yang

We study distributionally robust online learning, where a risk-averse learner updates decisions sequentially to guard against worst-case distributions drawn from a Wasserstein ambiguity set centered at past observations. While this paradigm…

Machine Learning · Computer Science 2026-02-25 Guixian Chen , Salar Fattahi , Soroosh Shafiee

We propose a scalable robust learning algorithm combining kernel smoothing and robust optimization. Our method is motivated by the convex analysis perspective of distributionally robust optimization based on probability metrics, such as the…

Machine Learning · Computer Science 2022-02-22 Jia-Jie Zhu , Christina Kouridi , Yassine Nemmour , Bernhard Schölkopf

We introduce a distributionally robust maximum likelihood estimation model with a Wasserstein ambiguity set to infer the inverse covariance matrix of a $p$-dimensional Gaussian random vector from $n$ independent samples. The proposed model…

Optimization and Control · Mathematics 2018-05-21 Viet Anh Nguyen , Daniel Kuhn , Peyman Mohajerin Esfahani

We revisit Markowitz's mean-variance portfolio selection model by considering a distributionally robust version, where the region of distributional uncertainty is around the empirical measure and the discrepancy between probability measures…

Methodology · Statistics 2018-02-15 Jose Blanchet , Lin Chen , Xun Yu Zhou

We consider a distributionally robust second-order stochastic dominance constrained optimization problem. We require the dominance constraints hold with respect to all probability distributions in a Wasserstein ball centered at the…

Optimization and Control · Mathematics 2021-10-20 Yu Mei , Jia Liu , Zhiping Chen

We show that several machine learning estimators, including square-root LASSO (Least Absolute Shrinkage and Selection) and regularized logistic regression can be represented as solutions to distributionally robust optimization (DRO)…

Statistics Theory · Mathematics 2020-10-22 Jose Blanchet , Yang Kang , Karthyek Murthy

We propose a distributionally robust classification model with a fairness constraint that encourages the classifier to be fair in view of the equality of opportunity criterion. We use a type-$\infty$ Wasserstein ambiguity set centered at…

Machine Learning · Computer Science 2021-07-13 Yijie Wang , Viet Anh Nguyen , Grani A. Hanasusanto

Data-driven Distributionally Robust Optimization (DD-DRO) via optimal transport has been shown to encompass a wide range of popular machine learning algorithms. The distributional uncertainty size is often shown to correspond to the…

Machine Learning · Statistics 2021-05-12 Jose Blanchet , Yang Kang , Fan Zhang , Fei He , Zhangyi Hu

We study the distributionally robust optimization (DRO) in a dynamic context where the model uncertainty is captured by penalizing potential models in function of their adapted Wasserstein distance to a given reference model. We consider…

Probability · Mathematics 2025-09-30 Yifan Jiang

The quantization problem aims to find the best possible approximation of probability measures on ${\mathbb{R}}^d$ using finite, discrete measures. The Wasserstein distance is a typical choice to measure the quality of the approximation.…

Probability · Mathematics 2023-09-11 Rajmadan Lakshmanan , Alois Pichler