arXiv:2608. 05367v1 Announce Type: new Abstract: Counterfactual analysis aims to predict potential outcomes under hypothetical scenarios, offering valuable insights for decision-making.
arXiv:2607. 00856v1 Announce Type: cross Abstract: In recent years, large language models have achieved remarkable success and have seen growing adoption in financial applications.
arXiv:2606. 18418v1 Announce Type: new Abstract: The increasing use of machine learning algorithms in social applications has raised concerns about fairness and transparency, leading to the development of counterfactual explanations.
iFlip is an iterative refinement method for generating counterfactual examples using large language models. It incorporates three feedback types—model confidence, feature attribution, and natural language—to guide successive edits. Experiments show iFlip outperforms five state‑of‑the‑art baselines, achieving a 57.8% higher validity rate and improving model performance through counterfactual data augmentation.
arXiv:2606. 19416v1 Announce Type: new Abstract: Loan origination is the process by which a lender creates a new loan, from application and underwriting through approval and funding.
The paper introduces a framework that uses large language models (LLMs) to generate natural‑language narratives explaining cross‑sectional stock return predictions. It combines temporal Shapley additive explanations (SHAP) from an XGBoost model with historical regime analogs to provide context. A controlled study shows that progressively externalizing numerical and relational reasoning improves evidence faithfulness and accuracy, while historical analogs boost human‑rated usefulness.
arXiv:2606. 08696v1 Announce Type: cross Abstract: Counterfactual recourse aims to provide actionable feature changes that would alter an unfavorable decision made by a predictive model.
arXiv:2607. 22045v1 Announce Type: new Abstract: Counterfactual explanations are a prominent approach in explainable artificial intelligence (xAI), providing actionable guidance on what input changes would alter a model's prediction to a desired outcome.
arXiv:2605. 18147v2 Announce Type: replace Abstract: Predictive models play a pivotal role in credit risk management, guiding critical decisions through accurate estimation of default probabilities and losses.
Counterfactual (CF) explanations identify changes that alter an input's classification. While existing methods produce realistic and low-cost CFs, they often fail to ensure feasibility, by suggesting...
The study investigates whether Large Language Models (LLMs) can translate technical explanations from credit risk models into stakeholder-friendly narratives. Using Freddie Mac loan data, the authors compare standard tabular models (XGBoost + SHAP) with alternative data pipelines (GNN + GNNExplainer and a bimodal mix) and generate explanations with three LLM configurations: a small fine‑tuned Gemma 3 4B, a large fine‑tuned DeepSeek R1 70B, and a zero‑shot Gemini 2.5. Findings show that the quality of explanations is more dependent on the evidence representation than on the LLM, that narratives reliably identify influential factors but are less consistent about the direction of influence, and that credit professionals demand higher evidentiary standards than non‑professionals.
The paper discusses how large language models (LLMs) can be fine‑tuned with observational data to improve alignment with human preferences and business goals. It highlights that directly using such data can cause models to learn spurious correlations, and introduces DeconfoundLM, a method that removes known confounders from reward signals. Experiments show that DeconfoundLM better recovers causal relationships and outperforms baseline methods by over 16% in objective score when confounding is present.
arXiv:2607. 21806v1 Announce Type: new Abstract: Predictive machine learning (ML) models are increasingly used to aid human decision-makers across various high-risk domains such as healthcare and criminal justice.