Related papers: What Is the Alignment Tax?
This study considers a model of the income distribution of agents whose pairwise interaction is asymmetric and price-invariant. Asymmetric transactions are typical for chain-trading groups who arrange their business such that commodities…
Risk-sharing is one way to pool risks without the need for a third party. To ensure the attractiveness of such a system, the rule should be accepted and understood by all participants. A desirable risk-sharing rule should fulfill actuarial…
The upper tail of a claim size distribution of a property line of business is frequently modelled by Pareto distribution. However, the upper tail does not need to be Pareto distributed, extraordinary shapes are possible. Here, the…
Extensive monitoring systems generate data that is usually compressed for network transmission. This compressed data might then be processed in the cloud for tasks such as anomaly detection. However, compression can potentially impair the…
In the application of machine learning to real-life decision-making systems, e.g., credit scoring and criminal justice, the prediction outcomes might discriminate against people with sensitive attributes, leading to unfairness. The commonly…
Optimization of three-dimensional road alignments is a nonlinear non-convex optimization problem. The development of models that fully optimize a three-dimensional road alignment problem is challenging due to numerous factors involved and…
We introduce two models of taxation, the latent and natural tax processes, which have both been used to represent loss-carry-forward taxation on the capital of an insurance company. In the natural tax process, the tax rate is a function of…
Advancements in mathematical programming have made it possible to efficiently tackle large-scale real-world problems that were deemed intractable just a few decades ago. However, provably optimal solutions may not be accepted due to the…
Large language models improve with scale, yet feedback-based alignment still exhibits systematic deviations from intended behavior. Motivated by bounded rationality in economics and cognitive science, we view judgment as resource-limited…
We consider a nonlinear pricing environment with private information. We provide profit guarantees (and associated mechanisms) that the seller can achieve across all possible distributions of willingness to pay of the buyers. With a…
A wide range of machine learning applications such as privacy-preserving learning, algorithmic fairness, and domain adaptation/generalization among others, involve learning invariant representations of the data that aim to achieve two…
A complete description of taxation systems that ensure sustainable economic development is given. These tax systems depend on production technologies and gross output volumes. Explicit formulas for such dependencies are found. In a…
This paper introduces alignment games, a new class of zero-sum games modeling strategic interventions where effectiveness depends on alignment with an underlying hidden state. Motivated by operational problems in medical diagnostics,…
Motivated by fairness concerns, we study the `portfolio problem': given an optimization problem with set $D$ of feasible solutions, a class $\mathbf{C}$ of fairness objective functions on $D$, and an approximation factor $\alpha \ge 1$, a…
We analyse the effect of a proportional wealth tax on asset returns, portfolio choice, and asset pricing. The tax is levied annually on the market value of all holdings at a uniform rate. We show that such a tax is economically equivalent…
In computing, as in many aspects of life, changes incur cost. Many optimization problems are formulated as a one-time instance starting from scratch. However, a common case that arises is when we already have a set of prior assignments, and…
Comparing observed behavior (event data generated during process executions) with modeled behavior (process models), is an essential step in process mining analyses. Alignments are the de-facto standard technique for calculating conformance…
Team assembly is a problem that demands trade-offs between multiple fairness criteria and computational optimization. We focus on four criteria: (i) fair distribution of workloads within the team, (ii) fair distribution of skills and…
We introduce a simple model of economy, where the time evolution is described by an equation capturing both exchange between individuals and random speculative trading, in such a way that the fundamental symmetry of the economy under an…
This paper attempts to find a relationship between agents' risk aversion and inequality of incomes. Specifically, a model is proposed for the evolution in time of surplus/deficit distribution, and the long-time distributions are…