$DT^2$: Decision-Targeted Digital Twins

arXiv:2606.25923v1 Announce Type: new Abstract: A digital twin (DT) is a virtual model of a real-world system that can assist decision-making by simulating scenarios induced by different policies. However, typical machine learning-based DTs do not optimise for this use case. We prove that, when model capacity is limited, training DTs to minimise one-step transition errors can produce suboptimal models for ranking sets of policies according to a reward function. We further show that this holds empirically, even with expressive model classes. To address this, we introduce $DT^2$, a decision-targeted DT training paradigm. Firstly, $DT^2$ uses fitted Q-evaluation to estimate values of candidate policies from offline data. A DT is then trained to generate rollouts that preserve pairwise policy rankings derived from these proxy ground-truth values with an architecture-agnostic loss function. We empirically demonstrate the efficacy of our method across a range of settings and architectures. $DT^2$ consistently improves policy ranking and reduces decision regret during policy selection relative to conventional DT training, both for policies used during training and for unseen policies, while maintaining a good level of raw simulation fidelity.