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01.
arXiv (CS.CL) 2026-06-19

When Lower Privileges Suffice: Investigating Over-Privileged Tool Selection in LLM Agents

As LLM agents increasingly select tools autonomously, their choices among tools with different privileges become safety-relevant. However, prior tool-selection studies focus on safety-agnostic metadata preferences, leaving privilege-sensitive choices underexplored. To address this gap, we study over-privileged tool selection, in which an agent selects or escalates to a higher-privilege tool despite a sufficient lower-privilege alternative. We introduce ToolPrivBench to evaluate whether agents choose higher-privilege tools despite sufficient lower-privilege alternatives, measuring both initial selection and escalation after transient tool failures. Across eight domains and five recurring risk patterns, we find that over-privileged tool selection is common among mainstream LLM agents and is further amplified by transient failures. We further find that general safety alignment does not reliably transfer to least-privilege tool choice, while prompt-level controls provide only limited mitigation under transient failures. We therefore introduce a privilege-aware post-training defense that teaches agents to prefer sufficient lower-privilege tools and escalate only when necessary. Our mitigation experiments show that this defense substantially reduces unnecessary high-privilege tool use while preserving general capabilities.

02.
arXiv (quant-ph) 2026-06-12

A refined thermodynamic analysis of nonsecular master equations

arXiv:2606.13504v1 Announce Type: new Abstract: We present a systematic thermodynamic analysis of nonsecular master equations. We consider master equations resulting either from the partial secular and the geometric-arithmetic approximations, two approximations ensuring the positivity of the system's dynamics when some of its transition frequencies are too small to enable the full secular approximation. Both cause the system to relax towards a steady state which is not the Gibbs state of its bare Hamiltonian. Nonetheless, we build a unified, consistent thermodynamic framework for those dynamics. Starting from a microscopic expression of the second law based on system-environment correlations, we employ a systematic perturbation theory to preserve the positivity of the second law despite the approximations done on the dynamics. We show that, in spite of the weak system-bath coupling, the system-bath interaction energy participates to the energy balance, as well as the Lamb-shift. Those extra contributions give rise to work performed by the system on the bath when the former is out of equilibrium. We compare this microscopic entropy production with the definition based on the contractivity of the reduced system dynamics (Spohn inequality). We show that, unlike for secular master equations, the two entropy production rates differ because of the presence of non-vanishing stationary coherences in the energy eigenbasis. However, in the case of a single thermal bath, the difference is purely transient, and no work can be cyclically extracted from the steady-state despite its non-Gibbs form. Finally, we illustrate our results with a simple example, clarifying and completing the thermodynamic picture of Markovian dynamics in the quantum regime.

03.
arXiv (CS.CL) 2026-06-16

The Value Axis: Language Models Encode Whether They're on the Right Track

We investigate whether language models internally track the value of their current trajectory, defined as the likelihood that their ongoing strategy will achieve their goals. Using synthetic, in-context reinforcement learning data, we construct a "value" axis for Qwen3-8B. We find that activations along this axis distinguish between high vs. low verbalized confidence, rollouts without and with backtracking, and correct vs. corrupted code. Steering towards high value causally suppresses self-correction and reduces explanatory verbosity, while steering towards low value induces backtracking and exploration. We demonstrate that direct preference optimization (DPO) can increase the internal value of rewarded behaviors (e.g. use a certain word), causing the model to act more confidently after exhibiting them. Finally, we apply the value axis to study in-the-wild settings. For example, we find that Qwen assigns low value to politically sensitive chat queries after post-training and that supervised fine-tuning increases internal confidence within the training domain. Our results suggest that language models linearly encode an estimate of expected goal success that modulates their confidence in pursuing a direction.

04.
arXiv (CS.CV) 2026-06-25

Chorus II: Cross-Request Sparsity Reuse for Efficient Image-to-Video Generation

Serving diffusion models for image-to-video generation is computationally expensive, posing significant challenges for large-scale deployment. Real I2V workloads often contain similar requests, such as repeated effect templates, related subjects, and recurring shot layouts. Existing cross-request acceleration methods mainly exploit this redundancy through feature reuse. We observe that similar I2V requests also share highly consistent sparse attention patterns, enabling historical sparse masks to serve as request-conditioned priors with almost no online mask-prediction overhead. We propose a cross-request reuse framework centered on sparsity reuse, with feature reuse as an optional extension safeguarded by a lightweight guidance enhancement. Our sparsity reuse is implemented as shared sparse mask reuse, which reuses high-quality sparse masks from similar historical requests to avoid per-request online mask prediction. Optional feature reuse applies downsampled computation to highly redundant spatiotemporal regions, mitigating boundary artifacts while preserving efficiency gains. Guidance enhancement reinforces image/text conditioning after reuse, mitigating semantic drift and condition-adherence issues. Experiments show that default sparsity reuse configuration preserves generation quality with a 2.16$\times$ speedup.

05.
medRxiv (Medicine) 2026-06-15

Neural Correlates of Human Food Memory link to Microbial, Homeostatic, and Hedonic Signals: Evidence from a Prebiotic Randomized Clinical Trial

Background Homeostatic and hedonic brain circuits regulate eating behavior but also shape how food memories are encoded and retrieved. Objective We examined neural correlates during food memory encoding and retrieval during functional MRI before and after a 14-day prebiotic intervention in a preregistered, double-blind crossover trial (NCT03829189). Design 55 healthy adults with overweight (19 females, age 28{+/-}6.5, BMI 25-30 kg/m2) underwent 3 Tesla task-based functional MRI before and after dietary intervention of prebiotic (30g inulin/day) or equicaloric placebo for 14 days. Peripheral metabolic, short-chain fatty acids (SCFA), and microbial markers using 16S rRNA analysis were assessed in fasting blood and feces. Results Food memory was enhanced by assigned reward value and engaged brain activity in hedonic regions, including the nucleus accumbens, orbitofrontal cortex, caudate, cingulate, dorsomedial prefrontal cortex, and ventral tegmental area, as well as homeostatic and memory-related such as the hypothalamus and the hippocampus. Higher neural activations during food encoding were related to higher Actinobacteriota abundance, fecal SCFA acetate, and creatinine levels, and lower ghrelin levels. Activations in reward-related and homeostatic brain areas partially correlated with insulin, glucagon-like peptide-1, leptin, and thyroid-stimulating hormone levels. Neural activations related to food memory decreased after prebiotic intervention. The prebiotic supplementation induced decrease of hippocampal activity during food encoding related to changes in gut microbiota Firmicutes abundance. Conclusions This study indicates that neuronal food-related memory processes depend on homeostatic and hedonic brain signals modulated by the gut-brain axis. Our findings raise implications for the treatment of obesity and substance use disorder.

06.
arXiv (CS.AI) 2026-06-24

Beyond the Autoregressive Horizon: A Comprehensive Survey of Diffusion Models, World Modelling, and State Space Models for Code

arXiv:2606.23690v1 Announce Type: cross Abstract: Autoregressive (AR) language models have driven significant progress in automated software engineering, enabling powerful code generation and assistance systems. However, the next-token prediction paradigm introduces structural limitations for code reasoning, including restricted global planning, challenges in maintaining long-range dependencies, and limited grounding in program execution semantics. Noting the heavy skewness of existing literature towards AR models, we discuss emerging paradigms that could potentially overcome the logic and scaling bottlenecks of next-token prediction by unlocking next-generation architectural capabilities for code intelligence. Specifically, we discuss the potential of Diffusion Models, which generate code via holistic denoising that captures long-range syntactic constraints often missed by AR models. We also discuss Code World Models (CWMs), which simulate execution states to support reasoning, and State Space Models (SSMs), which provide linear-time efficiency for massive contexts. By connecting these developments with findings from cognitive neuroscience, we outline directions for developing "System 2" code generation agents.

07.
arXiv (CS.AI) 2026-06-17

Know Thy Reasoner: Not All Language Models Explore Alike

arXiv:2604.10827v2 Announce Type: replace Abstract: Compute scaling for LLM reasoning trades off exploring solution approaches (breadth) against refining promising ones (depth), yet why a given trade-off works, and why it often fails to transfer across models, remains unclear. We argue that the optimal strategy depends on the model's diversity profile, the spread of probability mass across solution approaches, and that this must be characterized before any exploration strategy is adopted. We formalize this with a framework decomposing reasoning uncertainty, deriving when depth-based refinement outperforms parallel sampling, and validate it across three model families at both inference and training. Our central finding is that the diversity regime dictates the strategy: low-diversity aligned models benefit from depth-based refinement with lightweight intrinsic signals, whereas high-diversity base models are often harmed by it, and instead need breadth or stronger signals to compensate.

08.
arXiv (CS.LG) 2026-06-11

Neural ensemble Kalman filter: Data assimilation for compressible flows with shocks

arXiv:2602.23461v2 Announce Type: replace-cross Abstract: Data assimilation (DA) for compressible flows with shocks is challenging because many classical DA methods generate spurious oscillations and nonphysical features near uncertain shocks. We focus here on the ensemble Kalman filter (EnKF). We show that the poor performance of the EnKF may be attributed to the bimodal forecast distribution that can arise in the vicinity of an uncertain shock location; this violates the assumptions underpinning the EnKF, which assume a forecast which is close to Gaussian. To address this issue we introduce the new neural EnKF. The basic idea is to systematically embed neural function approximations within ensemble DA by mapping the forecast ensemble of shocked flows to the parameter space (weights and biases) of a deep neural network (NN) and to subsequently perform DA in that space. The nonlinear mapping encodes sharp and smooth flow features in an ensemble of NN parameters. Neural EnKF updates are therefore well-behaved only if the NN parameters vary smoothly within the neural representation of the forecast ensemble. We show that such a smooth variation of network parameters can be enforced via physics-informed transfer learning, and demonstrate that in so-doing the neural EnKF avoids the spurious oscillations and nonphysical features that plague the EnKF. The applicability of the neural EnKF is demonstrated through a series of systematic numerical experiments with the inviscid Burgers' equation, the Sod shock tube, and a two-dimensional blast wave.

09.
arXiv (CS.CV) 2026-06-16

CycliST: A Video Language Model Benchmark for Reasoning on Cyclical State Transitions

We present CycliST, a novel benchmark dataset designed to evaluate Video Language Models (VLM) on their ability for textual reasoning over cyclical state transitions. CycliST captures fundamental aspects of real-world processes by generating synthetic, richly structured video sequences featuring periodic patterns in object motion and visual attributes. CycliST employs a tiered evaluation system that progressively increases difficulty through variations in the number of cyclic objects, scene clutter, and lighting conditions, challenging state-of-the-art models on their spatio-temporal cognition. We conduct extensive experiments with current state-of-the-art VLMs, both open-source and proprietary, and reveal their limitations in generalizing to cyclical dynamics such as linear and orbital motion, as well as time-dependent changes in visual attributes like color and scale. Our results demonstrate that present-day VLMs struggle to reliably detect and exploit cyclic patterns, lack a notion of temporal understanding, and are unable to extract quantitative insights from scenes, such as the number of objects in motion, highlighting a significant technical gap that needs to be addressed. More specifically, we find no single model consistently leads in performance: neither size nor architecture correlates strongly with outcomes, and no model succeeds equally well across all tasks. By providing a targeted challenge and a comprehensive evaluation framework, CycliST paves the way for visual reasoning models that surpass the state-of-the-art in understanding periodic patterns.

10.
arXiv (CS.AI) 2026-06-15

Refusal Beyond a Single Direction: A Preliminary Comparison of Diff-in-Means and INLP

arXiv:2606.13720v1 Announce Type: new Abstract: Arditi et al. (2024) has shown that refusal in safety fine-tuned chat models is mediated by a single linear direction in the residual stream, recoverable by a difference-in-means (DiM) of harmful and harmless activations. We compare DiM-based interventions (activation addition and directional ablation) with two interventions derived from Iterative Nullspace Projection (INLP) – nullspace projection and counterfactual flipping – on five open-weight chat models, asking whether INLP can match DiM at steering refusal and whether its richer parameterisation yields more tweakable interventions. INLP counterfactual flipping is competitive with DiM directional ablation on refusal suppression, while nullspace projection is consistently weaker. Restricting INLP to the leading directions of the extracted subspace preserves most of the suppression effect at near-baseline perplexity, giving a tunable capability. Geometrically, the two INLP interventions land in qualitatively different regions of activation space: nullspace projection collapses transformed activations between the harmful and harmless clusters, while counterfactual flipping moves them into the opposite cluster, suggesting that the model encodes the absence of a concept differently from its opposite – an intriguing distinction that warrants further investigation in future work.

11.
arXiv (CS.CL) 2026-06-19

Med-R2: Perception and Reflection-driven Complex Reasoning for Medical Report Generation

Automated medical report generation (MRG) is increasingly used to reduce the burden of manual reporting and for decision support. Large vision-language models (LVLMs) hold great promise for automated MRG due to their fine-grained image-text alignment and advanced text-generation capabilities. Currently, state-of-the-art MRGs primarily focus on adapting pre-trained LVLMs with direct supervised fine-tuning (SFT), a fine-tuning strategy with medical image-report pairs. However, several factors limit the performance of these LVLMs. Firstly, direct SFT enables LVLMs to generate medical reports directly without an intermediate thinking process of pathological feature perception and diagnostic reasoning. This causes a potential failure to perceive pathological features and thus leads to misdiagnosis. Secondly, direct SFT lacks the incorporation of radiology-specific knowledge guidance, causing LVLMs to misinterpret perceived pathological features and make incorrect diagnoses. To address these gaps, we propose a novel fine-tuning strategy named Med-R2. We introduce a perception-driven long reasoning process that precedes report generation and incorporates radiology-specific knowledge as guidance. Additionally, to alleviate potential perceptual errors in complex reasoning, a reflection mechanism is introduced to refine the perception of pathological features and the generated report. Our experiments demonstrate that Med-R2 effectively enhances the capability of pathological features perception and diagnosis accuracy for MRG via fine-tuned LVLMs.

13.
arXiv (CS.CV) 2026-06-17

Learning a Maximum Entropy Model for Visual Textures using Diffusion

Visual textures – spatially homogeneous image regions containing repeated elements (e.g. a field of grass, the bark of a tree) – are ubiquitous in visual scenes and provide important cues for recognizing and analyzing materials and objects. A number of existing texture models extract essential statistics from a single texture image, and can then generate high-quality samples that are visually similar to the original by matching these statistics. However, their statistics are either hand-designed or based on a network pretrained for another purpose (e.g., object recognition). Here, we develop the first principled method for unsupervised learning of a set of statistics that are used to constrain a maximum entropy probability model. We leverage methods developed for generative diffusion models to derive training and sampling procedures, and compare these to the traditional method of sampling via matching the statistics. Despite the compactness of our trained model (512 statistics), it generates texture images whose quality is as good as or better than the current state-of-the-art model (~177k statistics). A more direct comparison of the two models, obtained by synthesizing images that are indistinguishable for one model but maximally different for the other, reveals their relative strengths and weaknesses. Finally, we show that unlike previous statistical texture models, a straight trajectory in the representation space of our model generates homogeneous texture samples that interpolate smoothly between the features of the two end points.

14.
arXiv (CS.AI) 2026-06-18

Deep Learning-Driven Inverse Design of Doherty Power Amplifiers Using Pixelated Combiners and Dual-State Impedance Synthesis

arXiv:2606.18395v1 Announce Type: cross Abstract: The output combiner of a Doherty power amplifier (PA) integrates load modulation, impedance matching, and phase compensation within a single network, making its design and synthesis highly challenging. In this paper, we propose a three-port Doherty combiner design methodology that combines deep convolutional neural networks (CNNs), pixelated layout representations, and genetic algorithms (GA) with dual-state impedance synthesis to address both peak and back-off power conditions. As a proof of concept, two GaN HEMT Doherty PA prototypes incorporating three-port pixelated combiners are designed and fabricated. Both prototypes achieve a measured saturated output power exceeding 44.2 dBm with peak drain efficiency above 71.2% within 2.6-2.8 GHz. Furthermore, a drain efficiency as high as 64% is measured at the 6-dB back-off level. After applying digital predistortion, each prototype achieves an adjacent channel leakage ratio (ACLR) better than -51.3 dBc.

15.
arXiv (CS.CL) 2026-06-15

MET-Bench: Multimodal Entity Tracking for Evaluating the Limitations of Vision-Language and Reasoning Models

Entity state tracking is a necessary component of world modeling that requires maintaining coherent representations of entities over time. Previous work has benchmarked entity tracking performance in purely text-based tasks. We introduce MET-Bench, a multimodal entity tracking benchmark designed to evaluate the ability of vision-language models to track entity states across modalities. Using three domains, we assess how effectively current models integrate textual and image-based state updates. Our findings reveal a significant performance gap between text-based and image-based entity tracking. We empirically show this discrepancy primarily stems from deficits in visual reasoning rather than perception. We further show that explicit text-based reasoning strategies improve performance, yet limitations remain, especially in long-horizon multimodal tasks. We apply reinforcement learning to improve entity tracking in open-source VLMs. This yields substantial in-modality gains, but does not transfer robustly across input modalities. Our results highlight the need for improved multimodal representations and reasoning techniques to bridge the gap between textual and visual entity tracking.

16.
arXiv (math.PR) 2026-06-24

Scheduling jobs with unknown size distribution in a M/G/1 queue: the shifted empirical Gittins

arXiv:2606.24703v1 Announce Type: new Abstract: In this paper we consider a M/G/1 queue for which we want to minimize the expected response time. We show how to compute indices from $n$ samples of the job size distribution such that the corresponding index policy is asymptotically optimal as $n$ grows. This construction is based on a discretization of the bounded support of the job size distribution and a shift of the samples to their nearest discrete point to the right. We show that the Gittins index of the empirical distribution of these shifted samples is close to the Gittins index of the original distribution. This translates to the asymptotic optimality of the corresponding index policy for minimizing the expected response time. Numerical comparison with other approaches further confirm the efficiency of our approach.

17.
arXiv (CS.CV) 2026-06-15

Enhancing Underwater Light Field Images via Global Geometry-aware Diffusion Process

This work studies the challenging problem of acquiring high-quality underwater images via 4-D light field (LF) imaging. To this end, we propose GeoDiff-LF, a novel diffusion-based framework built upon SD-Turbo to enhance underwater 4-D LF imaging by leveraging its spatial-angular structure. GeoDiff-LF consists of three key adaptations: (1) a modified U-Net architecture with convolutional and attention adapters to model geometric cues, (2) a geometry-guided loss function using tensor decomposition and progressive weighting to regularize global structure, and (3) an optimized sampling strategy with noise prediction to improve efficiency. By integrating diffusion priors and LF geometry, GeoDiff-LF effectively mitigates color distortion in underwater scenes. Extensive experiments demonstrate that our framework outperforms existing methods across both visual fidelity and quantitative performance, advancing the state-of-the-art in enhancing underwater imaging. The code will be publicly available at https://github.com/linlos1234/GeoDiff-LF.

18.
arXiv (CS.CL) 2026-06-15

Efficient Rationale-based Retrieval: On-policy Distillation from Generative Rerankers based on JEPA

Unlike traditional fact-based retrieval, rationale-based retrieval typically necessitates cross-encoding of query-document pairs using large language models, incurring substantial computational costs. To address this limitation, we propose Rabtriever, which independently encodes queries and documents, while providing comparable cross query-document comprehension capabilities to rerankers. We start from training a LLM-based generative reranker, which puts the document prior to the query and prompts the LLM to generate the relevance score by log probabilities. We then employ it as the teacher of an on-policy distillation framework, with Rabtriever as the student to reconstruct the teacher's contextual-aware query embedding. To achieve this effect, Rabtriever is first initialized from the teacher, with parameters frozen. The Joint-Embedding Predictive Architecture (JEPA) paradigm is then adopted, which integrates a lightweight, trainable predictor between LLM layers and heads, projecting the query embedding into a new hidden space, with the document embedding as the latent vector. JEPA then minimizes the distribution difference between this projected embedding and the teacher embedding. To strengthen the sampling efficiency of on-policy distillation, we also add an auxiliary loss on the reverse KL of LLM logits, to reshape the student's logit distribution. Rabtriever optimizes the teacher's quadratic complexity on the document length to linear, verified both theoretically and empirically. Experiments show that Rabtriever outperforms different retriever baselines across diverse rationale-based tasks, including empathetic conversations and robotic manipulations, with minor accuracy degradation from the reranker. Rabtriever also generalizes well on traditional retrieval benchmarks such as MS MARCO and BEIR, with comparable performance to the best retriever baseline.

19.
arXiv (CS.CL) 2026-06-24

Matching Tasks to Objectives: Fine-Tuning and Prompt-Tuning Strategies for Encoder-Decoder Pre-trained Language Models

Prompt-based learning has emerged as a dominant paradigm in natural language processing. This study explores the impact of diverse pre-training objectives on the performance of encoder-decoder pre-trained language models across generation and question answering tasks, with a focus on commonsense knowledge retrieval and completion. We highlight the benefits of incorporating multiple objectives during both pre-training and fine-tuning stages. We introduce the Match Task to Objective (MTO) framework and methods for determining the appropriate objective for a given task. This framework offers automated methods to prepare task-related data for adaptation through unsupervised training, based on the identified objective. In the fine-tuning stage, we design novel templates that align with the objectives of the pre-training and adaptation stages. When aligned with task requirements, these strategies can achieve a performance gain of over 120\% compared to conventional methods in few-shot settings. They significantly outperform related works in few-shot settings and exceed the baseline even in full-dataset scenarios. Furthermore, we extend this approach to include prompt-tuning methodologies, providing guidance for more effective soft prompt engineering and optimization. Our strategies significantly enhance prompt-tuning performance as well. These insights hold substantial value, precisely guiding the selection and optimization of models customized for specific tasks. Code is available at https://github.com/puraminy/MTO/

20.
arXiv (CS.CL) 2026-06-17

ZeroSyl: Simple Zero-Resource Syllable Tokenization for Spoken Language Modeling

Pure speech language models aim to learn language directly from raw audio without textual resources. A key challenge is that discrete tokens from self-supervised speech encoders result in excessively long sequences, motivating recent work on syllable-like units. However, methods like Sylber and SyllableLM rely on intricate multi-stage training pipelines. We propose ZeroSyl, a simple training-free method to extract syllable boundaries and embeddings directly from a frozen WavLM model. Using L2 norms of features in WavLM's intermediate layers, ZeroSyl achieves competitive syllable segmentation performance. The resulting segments are mean-pooled, discretized using K-means, and used to train a language model. ZeroSyl outperforms prior syllabic tokenizers across lexical, syntactic, and narrative benchmarks. Scaling experiments show that while finer-grained units are beneficial for lexical tasks, our discovered syllabic units exhibit better scaling behavior for syntactic modeling.

21.
arXiv (CS.LG) 2026-06-11

Simplicity Suffices for Parameter Noise Injection in Stochastic Gradient Descent

arXiv:2606.12054v1 Announce Type: new Abstract: Injecting noise into the optimization process is a well-established technique for improving the training and generalization of deep neural networks. Yet, despite the breadth of existing approaches, it remains unclear which design choices truly matter in practice. In this work, we investigate parameter noise injection for stochastic gradient descent, focusing on two key questions: how to efficiently pair each training example with its own perturbation in mini-batch training, and whether sophisticated noise parameterizations or multi-sample gradient averaging yield meaningful gains over simpler alternatives. To address the first question, we leverage a distributional identity for linear layers that allows per-example noise injection without breaking batched computation. To address the second, we systematically compare several diagonal Gaussian parameterizations against an isotropic baseline across varying noise levels on CIFAR100. Our results consistently show that simple, lightweight strategies, isotropic noise with a single perturbed forward pass per update step, recover most of the benefit of more complex schemes. These findings suggest that simplicity suffices for parameter noise injection, and that practitioners need not resort to elaborate perturbation designs to reap the optimization and generalization benefits of noisy SGD.

22.
arXiv (CS.AI) 2026-06-25

An Approach for a Supporting Multi-LLM System for Automated Certification Based on the German IT-Grundschutz

arXiv:2606.25608v1 Announce Type: cross Abstract: This paper presents a novel approach to perform semi-automated BSI IT-Grundschutz certification using a MultiLarge Language Model system (MLS) with Hybrid RetrievalAugmented Generation (HybridRAG). Facing the challenges of the Network and Information Security Directive 2 (NIS2) directive, a shortage of specialists, and high implementation costs, our MLS architecture aims to increase efficiency, reduce costs, and support certifiers in maintaining the quality of security concepts while meeting the increased demand for certifications of newly affected companies. The system combines Large Language Models (LLMs) and Knowledge Graphs (KGs) to support different phases of the certification process, including protection needs assessment, modeling, IT-Grundschutz check, measure consolidation, and subsequent realization. Our architecture addresses the growing demand for security concepts and offers an approach to handle the digital security challenges introduced by NIS2.

23.
arXiv (CS.AI) 2026-06-11

LSTM-Based Detection of Structural Breaks in Property Insurance Loss Reserving: A Climate-Informed Approach

arXiv:2606.11463v1 Announce Type: cross Abstract: Accurate loss reserving is foundational to insurer solvency, yet accelerating climate driven catastrophes systematically violate the stability assumptions on which traditional actuarial methods depend. This white paper presents a research program testing whether Long Short Term Memory (LSTM) neural networks can detect and adapt to these structural breaks faster and more accurately than Chain Ladder, Bornhuetter Ferguson, and Cape Cod methods. Using 15 plus years of regulatory development triangle data from Florida and Louisiana, enriched with NOAA hurricane intensity indices and sea surface temperatures, we hypothesize a targeted improvement of 15, 20% in reserve accuracy for catastrophe exposed years, a threshold grounded both in the prior neural network reserving literature and in the formal convergence results developed here. Beyond empirical validation, we develop a theoretical framework grounding LSTM structural break detection in probabilistic terms, providing formal performance guarantees that compensate for the limited number of catastrophe events in the test period. We document the research design, methodology, expected contributions, and a candid assessment of limitations.

24.
arXiv (CS.LG) 2026-06-24

Data Augmentation: A Fourier Analysis Perspective

arXiv:2606.24418v1 Announce Type: new Abstract: Data augmentation is a simple and model-agnostic approach for exploiting known invariances in learning problems. Given a group acting on the input space, one augments the training set with transformed copies of each sample. Because it exploits symmetries without modifying the underlying learning algorithm, data augmentation can be applied broadly across learning methods. However, this universality comes at a computational cost: when the group is large, full group-sized augmentation quickly becomes computationally infeasible. This raises a fundamental question: Can partial data augmentation achieve the same statistical benefits as full augmentation in terms of generalization and sample complexity? We develop a general framework for investigating this question using Fourier analysis and the representation theory of finite groups. We show that, for a broad class of classical learning problems, partial data augmentation based on a randomly sampled subset of group elements achieves the same minimax rates as full augmentation, up to an approximation error that vanishes as the subset size increases. Our results provide a theoretical explanation for why partial augmentation can retain the statistical benefits of full augmentation despite enforcing symmetry only approximately, and shed light on a recently raised question in learning with symmetries: whether statistically optimal learning under general group invariances can be achieved using computationally scalable methods. Moreover, we prove a complementary impossibility result: enforcing exact invariance via data augmentation requires averaging over the entire group, and cannot be achieved by any strict subset when the hypothesis space is sufficiently expressive. Together, these results provide a unified perspective on full and partial data augmentation, as well as exact and approximate symmetry enforcement.

25.
arXiv (CS.AI) 2026-06-12

FinSTaR: Towards Financial Reasoning with Time Series Reasoning Models

arXiv:2605.03460v3 Announce Type: replace Abstract: Time series (TS) reasoning models (TSRMs) have shown promising capabilities in general domains, yet they consistently fail in the financial domain, which exhibits unique characteristics. We propose a general 2 x 2 capability taxonomy for TSRMs by crossing 1) single-entity vs. multi-entity analysis with 2) assessment of the current state vs. prediction of future behavior. We instantiate this taxonomy in the financial domain-where the distinction between deterministic assessment and stochastic prediction is particularly critical-as ten financial reasoning tasks, forming the FinTSR-Bench benchmark based on S&P stocks. To this end, we propose FinSTaR (Financial Time Series Thinking and Reasoning), trained on FinTSR-Bench with distinct chain-of-thought (CoT) strategies tailored to each category. For assessment, which is deterministic (i.e., computable from observable data), we employ Compute-in-CoT, a programmatic CoT that enables models to derive answers directly from raw prices. For prediction, which is inherently stochastic (i.e., subject to unobservable factors), we adopt Scenario-Aware CoT, which generates diverse scenarios before making a judgment, mirroring how financial analysts reason under uncertainty. The proposed method achieves 78.9% average accuracy on FinTSR-Bench, substantially outperforming LLM and TSRM baselines. Furthermore, we show that the four capability categories are complementary and mutually reinforcing through joint training, and that Scenario-Aware CoT consistently improves prediction accuracy over standard CoT. Code is available at https://github.com/seunghan96/FinSTaR.