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Optimizing Regret

arXiv:2607.18866v2 Announce Type: replace-cross Abstract: Building on the identity that expected regret equals the covariance between costs and decisions, this paper develops a derivative theory of th

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safetyarxiv-cs-lg

arXiv:2607.18866v2 Announce Type: replace-cross Abstract: Building on the identity that expected regret equals the covariance between costs and decisions, this paper develops a derivative theory of the covariance regret functional. We derive the Gateaux derivative, showing that the universal steepest-descent direction is the contrarian policy -(c-ar c), while ascent yields momentum. For linear policies hatpi(c)=Ac+b, the gradient is the cost covariance matrix Sigma_c, with a zero Hessian implying boundary-optimal solutions such as the minimum-variance portfolio. We extend to constrained optimization, sign-gradient duality between regret minimization and alpha maximization, finite-sample convergence bounds paralleling Thompson Sampling, and gradient-descent algorithms requiring only input observations.

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Source: arXiv cs.LG | 2026-07-31

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