arXiv Machine Learning By Otto Nyberg, Davide Tugnoli, Fausto Carcassi, Giovanni Cin\`a

2-Step Agent: How a Bayesian Decision Maker Learns from AI-Decision Support

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The paper introduces the 2-Step Agent framework, a computational model that explains how a Bayesian decision maker updates beliefs and estimates causal effects after receiving a prediction from a machine‑learning model. It provides a tractable solution for the multivariate linear‑Gaussian case, identifies when machine‑learning decision support improves outcomes, and demonstrates that a single misaligned prior can cause the support to worsen decisions even with a well‑specified model.

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arXiv Machine Learning
4d ago

From Explaining to Enabling: Actionable Transparency in Algorithmic Insurance Pricing

The paper proposes a framework for making machine‑learning based insurance premiums explainable in a way that is valid, actionable, and reliable. It introduces axioms for each property and develops a method that uses Conformal Prediction to filter out uncertain recommendations, ensuring that suggested changes to controllable characteristics are likely to lower premiums. Experiments on real Florida flood‑insurance claims and synthetic driver‑telematics data show that constrained recommendations are more reliable and predict larger risk reductions than unconstrained ones.

By Agathe Fernandes Machado, Fei Huang