arXiv Machine Learning By Shivam Gupta

Contingent Exposure Routing for Financial AI: Outage Risk and the Cost of Indivisible Decisions

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The paper introduces a framework for routing financial decisions during system outages, using a local market‑impact response matrix to analyze expected squared price displacement. It shows that shared backups can create a concentration floor as primary endpoints increase, while balanced fallback risk diminishes with more surviving endpoints. For indivisible decisions, the authors derive exact second moments of randomized routing, propose conditional‑expectation rounding and a swap procedure, and demonstrate risk reductions of 6.57%–10.53% in synthetic tests and 3.30% in real API replay scenarios.

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