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arXiv2026

Dutch Books for Language Models

People increasingly use language models to support life decisions. Many such decisions involve a probabilistic forecast: How likely is a major life event, a natural disaster, or an economic outcome? Users of language models may implicitly trust that these forecasts fall out of a coherent world model. In this paper, we evaluate the coherence of language model probabilistic forecasts through a procedure that builds on a theorem due to de Finetti. We elicit forecasts from language models across events generated from stock returns data. We then use linear programs to compute the largest Dutch-book profit - the profit an arbitrageur could guarantee by betting against model-generated probabilities - which we use as a measure of incoherence. Our procedure does not require outcome labels, so we can evaluate coherence even in settings where outcomes are not observed or have not yet resolved. We find substantial evidence of incoherence in language model forecasts. Such incoherence increases when there are richer logical relationships between events, and irrelevant contextual details can increase incoherence by an order of magnitude. We conclude by discussing how alternative training strategies may improve probabilistic coherence.

econ.GN↗

arXiv2026

Asymptotically-informed neural networks for Black-Scholes implied volatility computation

The computation of Black-Scholes implied volatility is a fundamental task in quantitative finance, underpinning option valuation, model calibration and risk management. Although implied volatility is routinely used in practice, the inversion of the Black-Scholes pricing formula remains a challenging numerical problem, particularly in asymptotic regimes corresponding to extreme option prices, strikes or maturities, where the inverse map becomes highly sensitive to perturbations of the price. In this paper, we introduce a new family of asymptotically-informed neural-network architectures for implied-volatility computation. Exploiting the distinct behaviours of the Black-Scholes pricing function in different volatility regimes, we propose a family of architectures that learn a trainable partition of the price-log-moneyness domain through a system of gating functions and combines specialised local approximations of the implied-volatility function within each region. Extensive numerical experiments demonstrate that the proposed models consistently outperform standard feed-forward neural networks across a wide range of parameter domains, often by several orders of magnitude in relative accuracy while maintaining excellent generalisation properties. Furthermore, the neural-network outputs provide highly accurate initial guesses for a third-order Householder scheme, allowing near machine-precision implied-volatility computations after only two refinement iterations.

q-fin.CP↗

arXiv2026

Latent-Space No-Arbitrage Geometry of Generative Models for Implied Volatility Surfaces

Generative models for implied volatility surfaces must produce outputs that satisfy static no-arbitrage constraints. We study these constraints in latent space. For a fixed generator, we assign each latent code a scalar margin determined by the no-arbitrage conditions of the generated surface. The codes with nonnegative margin form the admissible latent set. We establish conditions under which strictly admissible codes remain admissible under small perturbations and the boundary of the admissible set is characterized by zero margin. For regular boundary components, we formulate a level-set equation whose local dynamics are directed toward the zero-margin set. The analysis treats the generator as a map from latent variables to surfaces and is therefore not restricted to a particular architecture. It applies to variational autoencoders, generative adversarial networks, and other generative models with a deterministic realization map. Numerical tests recover known boundaries in analytic examples. Experiments with a variational autoencoder trained on Heston surfaces show that similar reconstruction errors can correspond to different admissible regions and that the latent prior may be concentrated inside such a region. The computed boundary can also be used to modify latent codes that generate violating surfaces.

q-fin.CP↗

arXiv2026

Competitive Market Behavior of LLMs

Large language models (LLMs) are increasingly deployed as economic agents, yet there is little evidence whether LLM agents are suited for participating in market mechanisms designed for humans, and whether these mechanisms deliver desired outcomes when faced with LLM agents. We address this question by replicating seminal economic experiments, replacing human subjects with LLM agents. We place agents in a double auction environment, which is a widely-used market mechanism. We check whether such a market is able to deliver an efficient allocation of resources, thereby testing a novel dimension of alignment of LLM agents -- their compatibility with a fundamental market mechanism. We find that markets populated by LLM agents exhibit slower or no convergence towards market equilibrium, thus providing less efficient allocations than markets populated by humans. We then analyze agents' individual trading decisions and find substantial heterogeneity both across model families and market roles. We also run a lexical analysis of Chain-of-Thought (CoT) traces generated by the agents. We find that the decision to execute a trade rather than continue incrementally adjusting prices is associated with a shift from strategic considerations toward urgency. We publicly release our testing framework, which can be used for future evaluations.

cs.MA↗

arXiv2026

Tempting the Agent: The Economics of Reputation without Persistent Identity in AI Agent Markets

Reputation is a fundamental mechanism through which markets sustain trust when service quality cannot be perfectly assessed ex ante, constituting a form of intertemporal economic capital by attracting future demand. Its effectiveness as a disciplinary mechanism depends not only on past interactions but also on the persistence of the identity to which reputation is attached. When identities can be abandoned and recreated cheaply, reputational capital may itself become an object of opportunistic exploitation. This paper develops a dynamic economic framework to study when reputation is sufficient to discipline autonomous agents. We model reputation as capital attracting future economic activity. At each point, an agent chooses between operating honestly, investing in quality to preserve future gains, or executing a one-shot deviation to extract its reputation's value and restart from a penalized identity. Our analysis relates the temptation to opportunistic behavior to identity-reset costs, reputation persistence, demand sensitivity, and enforcement design, deriving comparative statics on optimal quality provision. Autonomous AI-agent operating on the blockchain are a relevant application: infrastructures such as ERC-8004, ERC-8183, and x402 combine reputation, identity, and payments in permissionless markets. Nonetheless, our framework applies to any environment where reputation generates future business and identities are replaceable.

q-fin.GN↗

arXiv2026

Evaluating Impacts of Traffic Regulations in Complex Mobility Systems Using Scenario-Based Simulations

Urban traffic regulation policies are increasingly used to address congestion, emissions, and accessibility in cities, yet their impacts are difficult to assess due to the socio-technical complexity of urban mobility systems. Recent advances in data availability and computational power enable new forms of model-driven, simulation-based decision support for transportation policy design. This paper proposes a novel simulation paradigm for the ex-ante evaluation of direct and indirect impacts, spanning traffic conditions, transportation-related effects and economic accessibility. The approach integrates a multi-layer urban mobility model combining a physical layer of mobility flows and emissions with a social layer capturing behavioral responses and adaptation to policy changes. Real-world data are used to instantiate the current as-is scenario, while policy alternatives and behavioral assumptions are encoded as model parameters to generate multiple what-if scenarios. The framework supports systematic comparison across scenarios by analyzing variations in simulated outcomes induced by policy interventions. The proposed approach is illustrated through a case study that aims to assess the impacts of the introduction of broad urban traffic restriction schemes. Results demonstrate the framework's ability to explore alternative regulatory designs and user responses, supporting informed and anticipatory evaluation of urban traffic policies.

cs.CY↗

arXiv2026

Performance Manipulation: Labor Market Implications in AI-assisted Era

Performance manipulation arises when agents exploit easily measurable, routine tasks to inflate observable outcomes without contributing genuine innovation or expert judgment. We formalize this phenomenon in a game-theoretic model in which agents allocate effort along two margins. Creative effort is non-routine cognitive labor whose return is complementary to the agent's private expertise; it is the scarce input that principals seek. Mechanistic effort is the execution of well-defined, rule-based tasks that raise performance independently of expertise, a commoditized input that AI heavily augments. We establish the existence of a symmetric, monotone pure-strategy equilibrium and show that performance-based screening remains viable so long as evaluations retain a sufficient creative component, but collapses into an uninformative pooling equilibrium once AI capability grows large enough to crowd out creative effort. Comparing contest allocations against a single-agent baseline isolates performance manipulation as the competition-induced over-investment in mechanistic effort, which we show is undertaken systematically by low-type agents but not high-type ones. We further prove that more sharply skewed reward structures mitigate this friction by eliciting greater creative effort across the participant pool. Finally, using a novel, language-model-based methodology to measure both effort types from nearly 1,500 Kaggle competition scripts, we provide robust empirical support for the model's predictions.

econ.GN↗

arXiv2026

Forecasting Weather-Driven Price Dynamics Across Sri Lankan Tea Market Catalogues

The Colombo Tea Auction (CTA) plays a vital role in determining global tea prices, yet the relationship between local weather conditions and price behavior across different tea catalogues has not been thoroughly explored. In this study, we develop a novel, structured dataset by extracting information from 105 weekly broker reports spanning late 2023 to 2026, and combined with region-specific weather data. Our analysis focuses on four main tea catalogues of Sri Lankan tea: High Grown, Low Grown, Off-Grade, and Dust. To better understand the factors influencing tea prices, we apply Granger causality analysis alongside tree-based machine learning models: Random Forest, XGBoost, LightGBM, and Gradient Boosting. Our results show that while market dynamics are primary drivers, weather conditions also have significant effects. Notably, Low Grown tea shows strong sensitivity to precipitation and sunshine duration (p<0.05) across 1-3-week lags. Off-Grade and Dust catalogues also exhibit significant responses to temperature variations. Catalogue-specific modelling outperformed unified approaches, with LightGBM emerging as the superior model for three out of four catalogues. Overall, this study highlights the importance of considering both localized weather patterns and catalogue-level differences when forecasting tea prices, offering a more precise and practical framework for the tea industry.

econ.GN↗

arXiv2026

Tastes without distinction: silicon samples and the synthetic construction of tastes

Large-language models have proven to be remarkable if inconsistent parrots of public attitudes and opinions. The extent to which LLMs are able to produce reasonable approximations of cultural taste remains an open empirical question that becomes more urgent by the day, with market research companies already offering provisional 'synthetic' survey panels and the contamination of standard survey data from LLM-generated responses. In this study, we build on past work on silicon sampling by extending considerations of their ecological, relational, and positional fidelity in the doomain of cultural tastes. We use large-language models from OpenAI, Anthropic, and DeepSeek to produce 554,940 silicon surrogates of survey respondents from the Survey of Public Participation in the Arts (SPPA). We find these silicon surrogates' tastes to be highly stylized facsimiles of human tastes. First, silicon samples are super-omnivorous with a systematic postive-bias for liking. These individual-level bias of silicon samples are not well-explained by the WEIRD-bias often discussed in the literature. Second, the complex relationality in real taste structures is completely distorted among silicon samples. Third, very little of the known cultural alignment between tastes and social space are preserved. Silicon samples juvenilize age-taste associations, resurrect anachronistic class-taste associations, and caricaturize gender- and race-taste associations. Key words: AI, taste, consumption, culture, silicon sampling, meta-analysis.

cs.CL↗

arXiv2026

The Price of Intelligence: A Quality-Adjusted Price Index for AI Services

Posted prices for AI inference have fallen steadily since 2024, yet the measured speed of that fall depends almost entirely on the method of measurement. This paper constructs quality-adjusted price indices for the AI inference market from public data. The panel assembles 21,024 posted-price observations across 3,208 models and 86 providers and joins them to 4,605 benchmark scores through a latent quality index estimated from benchmark response patterns, so the quality ladder of the hedonic tradition is built here from evaluations in place of product characteristics. Measured by the matched-model methods that statistical agencies apply to software, inference prices fell at 0.10 log points a year. The quality-adjusted index fell at 0.73, so 87% of the decline is invisible to current methods, with direct consequences for measured competition, concentration and productivity in this market. Counted per completed task, moreover, the buyer's price stopped falling. Reasoning models raised token consumption faster than token prices fell, and the seller's and buyer's prices accordingly diverged. A pre-registered validity audit disciplines the quality measure and yields the sharpest result. Excluding contamination-flagged benchmarks leaves model rankings intact at 0.998 yet moves the index by 0.49 log points a year, so the leaderboard-stability arguments standard in AI evaluation offer no defence of economic statistics built on benchmarks. Prices, quality and the audit are fully reproducible from public sources at zero cost.

econ.GN↗

arXiv2026

Measuring Computer Science Enthusiasm: A Questionnaire-Based Analysis of Age and Gender Effects on Students' Interest

This study examines how age and gender independently shape adolescents' interest in computer science (CS) education. Building on the Person-Object Theory of Interest (POI), we define enthusiasm as a short-term, activating response that combines positive affect, perceived relevance, and intention to re-engage. Because such enthusiasm can shift CS attitudes and engagement intentions even briefly, it offers a useful measure for short outreach activities. We developed a 28-item pre-post questionnaire to assess whether CS interventions raise enthusiasm, then applied it to more than 400 students (244 female, 187 male, aged 10-18) in CS courses. Contrary to the common assumption that early exposure secures lasting interest, we found a marked decline during early adolescence, especially among girls, along with wide variation in interest trajectories across ages. Exploratory factor analysis and ANOVA show that age predicts interest development more strongly than gender, and reveal specific developmental breakpoints. Although older students began with lower baseline attitudes, they showed the largest gains after the intervention, indicating that well-designed short activities can re-engage interest even later in adolescence. These results point to the need for CS education strategies that adapt to developmental stage rather than assuming a single early window matters most. Our validated questionnaire offers a way to measure immediate affective and motivational responses, giving researchers and practitioners a tool to evaluate whether specific interventions succeed in raising enthusiasm.

cs.SE↗

arXiv2026

Digital Engagement, Income Disparities, and Job Seeking in the United States since 2010

Surveys often record how frequently people use the internet without measuring the infrastructures, skills, and support systems that make digital participation possible. Using the U.S. National Longitudinal Survey of Youth 1997 cohort, we study how internet-use frequency relates to labor income, employment attachment, and job seeking after 2010. The main digital-engagement analysis uses the comparable 2011, 2013, and 2015 waves, with 2017 retained as later labor-market context. Across repeated cross sections, daily internet use consistently marks higher income and stronger employment attachment. Relative to daily use, less-than-daily use is associated with roughly 11 to 20 percent lower income, while nonuse is associated with about 18 to 21 percent lower income in 2011 and 2013. Respondents reporting no internet use are also 13 to 23 percentage points less likely to report full-year work. Job-search estimates reveal a distinct mechanism: active search is governed by employment status, search intensity, and application support, so a frequency item sorts respondents more sharply on durable labor-market attachment than on short-window search. Education accounts for a substantial share of the raw digital gradient, and pooled lagged-outcome and doubly robust transition estimates separate durable stratification from positive adoption margins. The results establish internet-use frequency as an informative behavioral marker of digitally mediated labor-market stratification and clarify why routine use should not be treated as a simple measure of digital access.

cs.CY↗

arXiv2026

Authority-Inference Separation in Agentic Finance: First-Line Control, Blockchain Enforcement, and Replayable Assurance

AI agents can select tools, counterparties, and transaction parameters, yet inference should not itself confer authority to execute a financial action. This study develops and evaluates Authority-Inference Separation (AIS), an intent-centered architecture for bounded agentic finance. AIS treats a financial action intent as the control object: a machine-generated proposal can receive temporary executable authority only after an independent deterministic control plane validates registered agent identity, accountable ownership, mandate and risk-appetite lineage, policy version, state, approvals, and exact economic semantics. Blockchain can then enforce the operational representation of granted authority and record portable settlement evidence, while institutional legitimacy, service delivery, accounting classification, and human accountability remain off-chain obligations. Evaluation combines four-domain instantiation, official BIS and MAS cases, a 48-fixture executable prototype, and a public-ledger observability test. Across 36 synthetic authorization attacks, a direct-agent baseline accepted 36 attack effects, a prompt-policy baseline accepted 20, and AIS accepted none; all three accepted 8/8 admissible fixtures. AIS also rejected 4/4 token replays and 8/8 recipient or rail substitutions, withheld completion in 4/4 service-delivery failures, and populated all 13 defined evidence fields. A test of 1,700 recent Base transactions associated with public x402 facilitator addresses shows that public ledgers can evidence settlement and selected authorization parameters but cannot establish institutional mandate, legal accountability, service delivery, or accounting treatment. AIS and blockchain are therefore complementary: AIS decides whether a specific intent may act, while blockchain can make granted authority bounded, executable, and independently observable.

q-fin.GN↗

arXiv2026

Pricing the DeFi Tail: Do Protocols or Depositors Price Operational Risk?

Similar to banks, DeFi protocols expose depositors to operational risk (USD 9.45 billion across 1,075 events since 2020). Unlike banks, they are not required to hold capital against it. A protocol may maintain a buffer voluntarily. Absent one, the risk falls on the depositor, who should then demand a risk premium in the supply yield. I quantify the underlying tail on one benchmark, a per-sector Basel loss-distribution approach fitted to a new operational risk event dataset, and test both margins against it. Tails in the four core sectors are no heavier than the Moscadelli banking band $[0.85, 1.39]$. Bridge, Derivatives, and the residual Other sector exhibit cyber-loss-level tails ($\hatξ\approx 1.6$), with point estimates past the infinite-mean boundary. The Lending tail implies a $\mathrm{VaR}_{99.9}$ capital buffer of 18% of TVL and of the ten largest Lending venues, the four holding a buffer cover on average 5% of it. Under market discipline, depositors should demand a higher yield in compensation where a venue does not maintain a buffer. I find that venues without a buffer pay a higher premium than those with (a 125-bps gap in medians): evidence the market discriminates in the right direction. However, the premium falls far short of an adequately priced tail. This unpriced tail falls disproportionately on the retail depositor, who sees only the posted rate but lacks the information and skills to price it. Because these products are not bank-regulated, I recommend disclosure over capital mandates: protocols, and any service providers that front access to it, should publish standardized losses, existing capital buffers and tail coverage.

q-fin.RM↗

arXiv2026

Single- and Multilevel Quadrature with Error Control for Fourier Pricing under the Rough Heston Model

Unlike the classical Heston model, Fourier pricing under the rough Heston model requires solving a fractional Riccati equation at every quadrature point. Since the required resolution varies with model parameters and quadrature point, a single uniform time discretization can be inefficient. We develop single- and multilevel Gauss-Laguerre quadrature methods that balance the time discretization and Fourier quadrature errors. Both methods scale the laguerre weight to the estimated Fourier integrand decay. The single-level method allocates a prescribed tolerance between the two errors. The multilevel method splits the integrand into a level-zero term and level differences, selecting quadrature points separately at each level. Suppose that the Fourier integrand discretization error is $O(Δt^p)$, that evaluating the characteristic function once costs $O(Δt^{-β})$, and that the algebraic Gauss-Laguerre quadrature error is $O(N^{-s_{SL}/2})$, where $s_{SL}$ is the smoothness index. Under this estimate and assumptions on the regularity and decay of level differences, we prove that the proposed single-level method requires $O(ε^{-(β/p+2/s_{SL})})$ computational work to achieve accuracy $ε$, whereas the proposed multilevel method requires $O(ε^{-β/p})$ computational work. We also study root-exponential Gauss-Laguerre error models for practical multilevel quadrature allocation. Numerical experiments support the observed fractional Riccati and Fourier integrand convergence rates and root-exponential quadrature behavior, and show substantial reductions in quadrature cost from the proposed scaling. The multilevel method provides clear computational savings over the single-level method. We further benchmark the multilevel fractional Riccati method against the BL2 Markovian approximation and report lower total CPU time in the tested configurations.

q-fin.CP↗

arXiv2026

Mudskippers use tail thrusting to help crutching to move on mud of various wetness

At the water-land interface, amphibious fishes encounter wet flowable substrates made of granular solid-water mixtures, which can stay solid or flow like a fluid. As these substrates become wetter or drier, their yield strength (at which solid-fluid transition occurs) and cohesion (how sticky they are) both change, challenging locomotion. Despite substantial understanding of tetrapod locomotion on flowable substrates (mostly dry sand), we know little about how amphibious fishes cope with wet flowable substrates of various wetness. Here, we studied mudskippers on clay mud of controlled, variable wetness over the range where solid-fluid transition occurs. As mud became wetter, its strength decreased by 100-fold, leading the animal to sink deeper, with larger areas of body and fins contacting mud. By contrast, mud stuck most easily at intermediate wetness. The increased sinkage and contact and stickiness change caused more mud to stick to and pull against the animal on wetter mud. We also tested dry mud, which stuck to animal fins as its mucus dried. Despite these challenges, the mudskipper predominately used a conserved crutching gait on all except the wettest mud tested, with a modest performance reduction. When normal crutching became less effective, the animal assisted it with tail thrusting, by bending and straightening it to push downward and backward to generate additional thrust and lift, or even thrusting the tail to jump. These observations suggest that mudskipper's crutching motor program is well adapted to its native muddy substrates but inflexible, with most novelty in tail use.

physics.bio-ph↗

arXiv2026

Beyond Accuracy: Quantifying Pulmonary Attribution in Anatomy-Guided Chest X-Ray Classification Under Domain Shift

Deep-learning models can achieve strong chest X-ray (CXR) classification performance without establishing whether their predictions predominantly rely on pulmonary image content. This study evaluates pulmonary attribution containment as an anatomy-related reliability property distinct from diagnostic performance. We propose DBCA-SegNet-MGAP, a multi-task anatomy-guided CNN-Transformer framework that combines complementary feature representations through bidirectional cross-backbone attention, predicts a soft lung mask, and incorporates this anatomical prior directly into classification through Mask-Guided Adaptive Global Average Pooling (MGAP). Pulmonary attribution containment is quantified using the Anatomical Local Energy Ratio (ALR) and high-intensity cumulative ALR (cALR@0.9). Experiments were repeated across three training seeds using the COVID-19 Radiography Database for four-class internal testing and a locked Shenzhen-to-Montgomery protocol for zero-shot external tuberculosis testing. On COVID-19, the proposed model achieved a weighted F1 of $0.9615 \pm 0.0015$ and macro ROC-AUC of $0.9906 \pm 0.0007$. In an architecture-matched dual-bridge comparison, replacing conventional GAP with MGAP increased ALR from $0.3878 \pm 0.0098$ to $0.7086 \pm 0.0104$ and cALR@0.9 from $0.5265 \pm 0.0101$ to $0.9905 \pm 0.0018$, while weighted F1 remained essentially unchanged ($0.9618 \pm 0.0015$ vs. $0.9615 \pm 0.0015$). Under locked external transfer to Montgomery, ROC-AUC remained $0.9080 \pm 0.0043$ and pulmonary ALR remained $0.6466 \pm 0.0081$, whereas weighted F1 decreased to $0.7528 \pm 0.0080$ and ECE increased to $0.1683 \pm 0.0055$. These findings show that diagnostic discrimination, calibration, and pulmonary attribution containment are distinct model properties and support their joint evaluation under internal testing and external domain shift.

cs.CV↗

arXiv2026

TAP-Path: Task-Adaptive Structural and Token Pruning for Efficient and Trustworthy Pathology Foundation Models

Pathology foundation models improve transferable representation learning for histopathology, but recent gains often rely on encoders with hundreds of millions of parameters and high inference cost. We propose TAP-Path, a task-adaptive compression framework that directly restructures a pretrained Virchow2 encoder rather than distilling it into a separate student. TAP-Path combines validation-driven transformer-block selection, physical removal of redundant blocks, input-adaptive patch-token pruning, multi-depth feature recovery, and a lightweight gated task head. The final model retains 24 of 32 transformer blocks and 70% of patch tokens after pruning, reducing encoder parameters by 24.96% (631.24M to 473.70M) and analytical encoder compute by 35.20% (340.13G to 220.40G FLOPs). Across three task-head optimization seeds, TAP-Path achieved $87.98 \pm 0.067%$ test accuracy, $81.26 \pm 0.49%$ balanced accuracy, and $82.38 \pm 0.48%$ macro-F1 on a 32-class histopathology benchmark, compared with 86.89% for full Virchow2 and 87.67% for UNI2-h. TAP-Path achieved a Brier score of $0.1800 \pm 0.0005$ and failure-detection AUROC of $0.9047 \pm 0.0060$. A validation-only rare-aware objective improved rare-class balanced accuracy in a secondary operating analysis. Frozen external evaluation on 433 CPTAC samples yielded $91.22 \pm 0.83%$ accuracy and $91.10 \pm 0.81%$ balanced accuracy. These results show that task-adaptive structural and token sparsification can improve the accuracy-efficiency trade-off of large pathology foundation models while preserving reliability under internal and external evaluation.

cs.CV↗