pith:77GGG73V
A Diagnostic Framework for Implementation Risk in Bilevel Decision Problems: The Ambiguity Premium and the Robustness--Efficiency Frontier
Bilevel decisions carry hidden implementation risk when follower responses are near-optimal rather than exactly optimal.
arxiv:2605.16780 v1 · 2026-05-16 · math.OC
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Claims
We establish a diameter bound Δ_ε(x) ≤ L_F(x) diam(S_ε(x)) and an O(√ε) estimate under quadratic lower-level growth. The contribution here is to make it operational as an implementation-risk diagnostic.
The lower-level problem satisfies a quadratic growth condition (or at least local Lipschitz continuity of the upper-level value function) that allows the O(√ε) rate and the diameter bound to hold; this is invoked to derive the estimates for the ambiguity premium.
The paper defines the ambiguity premium Δ_ε(x) as the gap between pessimistic and optimistic upper-level values over ε-optimal follower responses and provides bounds plus a screening workflow to trace robustness-efficiency frontiers in bilevel problems.
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| First computed | 2026-05-20T00:03:21.624424Z |
|---|---|
| Builder | pith-number-builder-2026-05-17-v1 |
| Signature | Pith Ed25519
(pith-v1-2026-05) · public key |
| Schema | pith-number/v1.0 |
Canonical hash
ffcc637f75ddff9ebc402810a6be2197b9f752557c5633985776b741239443be
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Canonical record JSON
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