arXiv AI By Caroline Gans Combe (INSEEC)

Marginal utility, matrix factorization, and the Key-Value (KV) cache: a unified information-economic framework for sovereign geo-mining inference

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This paper connects the economic concept of marginal utility with machine‑learning tools such as matrix factorization and the Key–Value cache used in transformer models. It shows that the singular‑value spectrum of a rating matrix, the eigenvalue spectrum of a projected covariance operator, and cache eviction/compression all follow a common utility‑maximization rule that keeps dimensions whose eigenvalue exceeds a shadow price. The framework is applied to automated extraction of structured data from geo‑mining documents, leading to a fast, high‑accuracy hierarchical classifier and a diagnostic that identifies a degenerate merging mode in a TIES model.

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