Daily Papers

AI agents that pay for resources via the x402 protocol embed payment metadata - resource URLs, descriptions, and reason strings - in every HTTP payment request. This metadata is transmitted to the payment server and to the centralised facilitator API before any on-chain settlement occurs; neither party is typically bound by a data processing agreement. We present presidio-hardened-x402, the first open-source middleware that intercepts x402 payment requests before transmission to detect and redact personally identifiable information (PII), enforce declarative spending policies, and block duplicate replay attempts. To evaluate the PII filter, we construct a labeled synthetic corpus of 2,000 x402 metadata triples spanning seven use-case categories, and run a 42-configuration precision/recall sweep across two detection modes (regex, NLP) and five confidence thresholds. The recommended configuration (mode=nlp, min_score=0.4, all entity types) achieves micro-F1 = 0.894 with precision 0.972, at a p99 latency of 5.73ms - well within the 50ms overhead budget. The middleware, corpus, and all experiment code are publicly available at https://github.com/presidio-v/presidio-hardened-x402.

Government fiscal policies, particularly annual union budgets, exert significant influence on financial markets. However, real-time analysis of budgetary impacts on sector-specific equity performance remains methodologically challenging and largely unexplored. This study proposes a framework to systematically identify and rank sectors poised to benefit from India's Union Budget announcements. The framework addresses two core tasks: (1) multi-label classification of excerpts from budget transcripts into 81 predefined economic sectors, and (2) performance ranking of these sectors. Leveraging a comprehensive corpus of Indian Union Budget transcripts from 1947 to 2025, we introduce BASIR (Budget-Assisted Sectoral Impact Ranking), an annotated dataset mapping excerpts from budgetary transcripts to sectoral impacts. Our architecture incorporates fine-tuned embeddings for sector identification, coupled with language models that rank sectors based on their predicted performances. Our results demonstrate 0.605 F1-score in sector classification, and 0.997 NDCG score in predicting ranks of sectors based on post-budget performances. The methodology enables investors and policymakers to quantify fiscal policy impacts through structured, data-driven insights, addressing critical gaps in manual analysis. The annotated dataset has been released under CC-BY-NC-SA-4.0 license to advance computational economics research.

We consider the task of evaluating policies of algorithmic resource allocation through randomized controlled trials (RCTs). Such policies are tasked with optimizing the utilization of limited intervention resources, with the goal of maximizing the benefits derived. Evaluation of such allocation policies through RCTs proves difficult, notwithstanding the scale of the trial, because the individuals' outcomes are inextricably interlinked through resource constraints controlling the policy decisions. Our key contribution is to present a new estimator leveraging our proposed novel concept, that involves retrospective reshuffling of participants across experimental arms at the end of an RCT. We identify conditions under which such reassignments are permissible and can be leveraged to construct counterfactual trials, whose outcomes can be accurately ascertained, for free. We prove theoretically that such an estimator is more accurate than common estimators based on sample means -- we show that it returns an unbiased estimate and simultaneously reduces variance. We demonstrate the value of our approach through empirical experiments on synthetic, semi-synthetic as well as real case study data and show improved estimation accuracy across the board.

This paper examines the fiscal and macroeconomic strategies essential for transition of India to a high income economy by 2047, aligning with the vision of Viksit Bharat. A sustainable annual GDP growth rate of 7 to 8 percent is projected as necessary to achieve this milestone while maintaining fiscal prudence through a targeted deficit threshold below 3.5 percent of GDP. The study underscores the role of disciplined fiscal management in financing critical public investments in infrastructure, human capital development and technological innovation. Given constraints on domestic resource mobilization, the paper highlights the importance of multilateral financial institutions, including the World Bank, IMF and ADB, in expanding fiscal space in India through concessional financing, technical cooperation, and risk sharing mechanisms. Using econometric modeling and scenario analysis, the research identifies key policy interventions in infrastructure, healthcare, education and sustainable energy that can maximize growth while ensuring fiscal sustainability. Policy recommendations include enhancing tax buoyancy, rationalizing expenditure, optimizing public private partnerships and strengthening fiscal responsibility frameworks. The findings suggest that a calibrated approach to growth, prudent fiscal management and strategic international collaborations are critical to achieving long term economic aspirations of India.

Tree-search decoding is an effective form of test-time scaling for large language models (LLMs), but real-world deployment imposes a fixed per-query token budget that varies across settings. Existing tree-search policies are largely budget-agnostic, treating the budget as a termination condition, which can lead to late-stage over-branching or premature termination. We propose {Budget-Guided MCTS} (BG-MCTS), a tree-search decoding algorithm that aligns its search policy with the remaining token budget: it starts with broad exploration, then prioritizes refinement and answer completion as the budget depletes while reducing late-stage branching from shallow nodes. BG-MCTS consistently outperforms budget-agnostic tree-search baselines across different budgets on MATH500 and AIME24/25 with open-weight LLMs.

LLM-agent budget overruns are a documented production failure class: a single retry loop can spend thousands of dollars before an operator notices, and the in-process integrity properties that would prevent it (no aliasing, no double-spend, no use-after-delegation of a cost-bearing value) are enforced, if at all, by ad-hoc wrappers rather than by the type system. Our central contribution is empirical: a catalog of 63 confirmed production incidents from 21 orchestration frameworks (2023-2026), each backed by a quoted GitHub issue and, where reported, a dollar loss, organized into an eight-cluster failure taxonomy (inter-rater Cohen's kappa = 0.837, N = 113), plus 47 supplementary structural entries. As one mitigation evaluated against this taxonomy, we build token-budgets, an 1,180-line Rust crate (no unsafe) that operationalizes affine ownership so that cloning, double-spending, or using a budget after delegating it are compile errors rather than runtime hazards an operator must remember to avoid. The dollar cap is runtime arithmetic under an estimator assumption; the affine layer makes that arithmetic non-bypassable. On single-agent workloads a 4-line Python counter matches the crate at 0/30 overshoot, so the distinguishing value is non-bypassability under operator error in multi-agent delegation: the delegation-fanout race documented in 11 incidents is rejected by the borrow checker at compile time, while the same pattern under asyncio overshoots 30/30 and three disciplined alternatives overshoot 0/30. Across five runtimes, three providers, and a temperature-stratified live-API test (N = 160), the approach reports zero cap violations and zero false refusals, at operational parity with concurrent work. Static over-reservation is 4-6x (2.11x adaptive). Binary-level cap-soundness on the running binary is left open.

The tension between data privacy and model utility has become the defining bottleneck for the practical deployment of large language models (LLMs) trained on sensitive corpora including healthcare. Differentially private stochastic gradient descent (DP-SGD) guarantees formal privacy, yet it does so at a pronounced cost: gradients are forcibly clipped and perturbed with noise, degrading sample efficiency and final accuracy. Numerous variants have been proposed to soften this trade-off, but they all share a handicap: their control knobs are hard-coded, global, and oblivious to the evolving optimization landscape. Consequently, practitioners are forced either to over-spend privacy budget in pursuit of utility, or to accept mediocre models in order to stay within privacy constraints. We present RLDP, the first framework to cast DP optimization itself as a closed-loop control problem amenable to modern deep reinforcement learning (RL). RLDP continuously senses rich statistics of the learning dynamics and acts by selecting fine-grained per parameter gradient-clipping thresholds as well as the magnitude of injected Gaussian noise. A soft actor-critic (SAC) hyper-policy is trained online during language model fine-tuning; it learns, from scratch, how to allocate the privacy budget where it matters and when it matters. Across more than 1,600 ablation experiments on GPT2-small, Llama-1B, Llama-3B, and Mistral-7B, RLDP delivers perplexity reductions of 1.3-30.5% (mean 5.4%) and an average 5.6% downstream utility gain. RLDP reaches each baseline's final utility after only 13-43% of the gradient-update budget (mean speed-up 71%), all while honoring the same (epsilon, delta)-DP contract and exhibiting equal or lower susceptibility to membership-inference and canary-extraction attacks.

Memory is increasingly central to Large Language Model (LLM) agents operating beyond a single context window, yet most existing systems rely on offline, query-agnostic memory construction that can be inefficient and may discard query-critical information. Although runtime memory utilization is a natural alternative, prior work often incurs substantial overhead and offers limited explicit control over the performance-cost trade-off. In this work, we present BudgetMem, a runtime agent memory framework for explicit, query-aware performance-cost control. BudgetMem structures memory processing as a set of memory modules, each offered in three budget tiers (i.e., Low/Mid/High). A lightweight router performs budget-tier routing across modules to balance task performance and memory construction cost, which is implemented as a compact neural policy trained with reinforcement learning. Using BudgetMem as a unified testbed, we study three complementary strategies for realizing budget tiers: implementation (method complexity), reasoning (inference behavior), and capacity (module model size). Across LoCoMo, LongMemEval, and HotpotQA, BudgetMem surpasses strong baselines when performance is prioritized (i.e., high-budget setting), and delivers better accuracy-cost frontiers under tighter budgets. Moreover, our analysis disentangles the strengths and weaknesses of different tiering strategies, clarifying when each axis delivers the most favorable trade-offs under varying budget regimes.

Privacy policies are supposed to provide notice. But what if substantive information appears only where users skip it? We identify a structural pattern we call jurisdiction-siloed disclosure: information about data practices appearing in specific, actionable form only within regional compliance sections labeled "California Residents" or "EU/UK Users," while general sections use vague or qualified language for the same practices. Our audit of 123 major companies identifies 282 potential instances across 77 companies (62.6% of this purposive sample). A conservative estimate restricted to practice categories validated against OPP-115 human annotations finds 138 instances across 54 companies (44%); post-2018 categories central to our findings await independent validation. If users skip jurisdiction-labeled sections as information foraging theory predicts, users outside regulated jurisdictions would receive less specific information about practices affecting them--a transparency failure operating through document architecture rather than omission. We propose universal substantive disclosure: practices affecting all users should appear in the main policy body, with regional sections containing only procedural rights information. This standard finds support in analogous disclosure regimes (securities, truth-in-lending, nutritional labeling) where material information must reach all affected parties. Regulators could operationalize this through the FTC's "clear and conspicuous" standard and GDPR transparency principles. This work is hypothesis-generating: we establish that the structural pattern exists and ground the transparency concern in behavioral theory, but direct measurement of jurisdiction-specific section skipping remains the critical validation priority. We release our methodology and annotated dataset to enable replication.

We present the LLM Economist, a novel framework that uses agent-based modeling to design and assess economic policies in strategic environments with hierarchical decision-making. At the lower level, bounded rational worker agents -- instantiated as persona-conditioned prompts sampled from U.S. Census-calibrated income and demographic statistics -- choose labor supply to maximize text-based utility functions learned in-context. At the upper level, a planner agent employs in-context reinforcement learning to propose piecewise-linear marginal tax schedules anchored to the current U.S. federal brackets. This construction endows economic simulacra with three capabilities requisite for credible fiscal experimentation: (i) optimization of heterogeneous utilities, (ii) principled generation of large, demographically realistic agent populations, and (iii) mechanism design -- the ultimate nudging problem -- expressed entirely in natural language. Experiments with populations of up to one hundred interacting agents show that the planner converges near Stackelberg equilibria that improve aggregate social welfare relative to Saez solutions, while a periodic, persona-level voting procedure furthers these gains under decentralized governance. These results demonstrate that large language model-based agents can jointly model, simulate, and govern complex economic systems, providing a tractable test bed for policy evaluation at the societal scale to help build better civilizations.

Building deployment-ready LLM agents requires complex orchestration of tools, data sources, and control flow logic, yet existing systems tightly couple agent logic to specific programming languages and deployment models. We present a declarative system that separates agent workflow specification from implementation, enabling the same pipeline definition to execute across multiple backend languages (Java, Python, Go) and deployment environments (cloud-native, on-premises). Our key insight is that most agent workflows consist of common patterns -- data serialization, filtering, RAG retrieval, API orchestration -- that can be expressed through a unified DSL rather than imperative code. This approach transforms agent development from application programming to configuration, where adding new tools or fine-tuning agent behaviors requires only pipeline specification changes, not code deployment. Our system natively supports A/B testing of agent strategies, allowing multiple pipeline variants to run on the same backend infrastructure with automatic metric collection and comparison. We evaluate our approach on real-world e-commerce workflows at PayPal, processing millions of daily interactions. Our results demonstrate 60% reduction in development time, and 3x improvement in deployment velocity compared to imperative implementations. The language's declarative approach enables non-engineers to modify agent behaviors safely, while maintaining sub-100ms orchestration overhead. We show that complex workflows involving product search, personalization, and cart management can be expressed in under 50 lines of DSL compared to 500+ lines of imperative code.

Quantified policy targets are a fundamental element of climate policy, typically characterised by domain-specific and technical language. Current methods for curating comprehensive views of global climate policy targets entail significant manual effort. At present there are few scalable methods for extracting climate targets from national laws or policies, which limits policymakers' and researchers' ability to (1) assess private and public sector alignment with global goals and (2) inform policy decisions. In this paper we present an approach for extracting mentions of climate targets from national laws and policies. We create an expert-annotated dataset identifying three categories of target ('Net Zero', 'Reduction' and 'Other' (e.g. renewable energy targets)) and train a classifier to reliably identify them in text. We investigate bias and equity impacts related to our model and identify specific years and country names as problematic features. Finally, we investigate the characteristics of the dataset produced by running this classifier on the Climate Policy Radar (CPR) dataset of global national climate laws and policies and UNFCCC submissions, highlighting the potential of automated and scalable data collection for existing climate policy databases and supporting further research. Our work represents a significant upgrade in the accessibility of these key climate policy elements for policymakers and researchers. We publish our model at https://huggingface.co/ClimatePolicyRadar/national-climate-targets and related dataset at https://huggingface.co/datasets/ClimatePolicyRadar/national-climate-targets.

Modern conversational agents like ChatGPT and Alexa+ rely on predefined policies specifying metadata, response styles, and tool-usage rules. As these LLM-based systems expand to support diverse business and user queries, such policies, often implemented as in-context prompts, are becoming increasingly complex and lengthy, making faithful adherence difficult and imposing large fixed computational costs. With the rise of multimodal agents, policies that govern visual and multimodal behaviors are critical but remain understudied. Prior prompt-compression work mainly shortens task templates and demonstrations, while existing policy-alignment studies focus only on text-based safety rules. We introduce Multimodal Policy Internalization (MPI), a new task that internalizes reasoning-intensive multimodal policies into model parameters, enabling stronger policy-following without including the policy during inference. MPI poses unique data and algorithmic challenges. We build two datasets spanning synthetic and real-world decision-making and tool-using tasks and propose TriMPI, a three-stage training framework. TriMPI first injects policy knowledge via continual pretraining, then performs supervised finetuning, and finally applies PolicyRollout, a GRPO-style reinforcement learning extension that augments rollouts with policy-aware responses for grounded exploration. TriMPI achieves notable gains in end-to-end accuracy, generalization, and robustness to forgetting. As the first work on multimodal policy internalization, we provide datasets, training recipes, and comprehensive evaluations to foster future research. Project page: https://mikewangwzhl.github.io/TriMPI.

Tackling real-world socio-economic challenges requires designing and testing economic policies. However, this is hard in practice, due to a lack of appropriate (micro-level) economic data and limited opportunity to experiment. In this work, we train social planners that discover tax policies in dynamic economies that can effectively trade-off economic equality and productivity. We propose a two-level deep reinforcement learning approach to learn dynamic tax policies, based on economic simulations in which both agents and a government learn and adapt. Our data-driven approach does not make use of economic modeling assumptions, and learns from observational data alone. We make four main contributions. First, we present an economic simulation environment that features competitive pressures and market dynamics. We validate the simulation by showing that baseline tax systems perform in a way that is consistent with economic theory, including in regard to learned agent behaviors and specializations. Second, we show that AI-driven tax policies improve the trade-off between equality and productivity by 16% over baseline policies, including the prominent Saez tax framework. Third, we showcase several emergent features: AI-driven tax policies are qualitatively different from baselines, setting a higher top tax rate and higher net subsidies for low incomes. Moreover, AI-driven tax policies perform strongly in the face of emergent tax-gaming strategies learned by AI agents. Lastly, AI-driven tax policies are also effective when used in experiments with human participants. In experiments conducted on MTurk, an AI tax policy provides an equality-productivity trade-off that is similar to that provided by the Saez framework along with higher inverse-income weighted social welfare.

Diffusion Policy (DP) has attracted significant attention as an effective method for policy representation due to its capacity to model multi-distribution dynamics. However, current DPs are often based on a single visual modality (e.g., RGB or point cloud), limiting their accuracy and generalization potential. Although training a generalized DP capable of handling heterogeneous multimodal data would enhance performance, it entails substantial computational and data-related costs. To address these challenges, we propose a novel policy composition method: by leveraging multiple pre-trained DPs based on individual visual modalities, we can combine their distributional scores to form a more expressive Modality-Composable Diffusion Policy (MCDP), without the need for additional training. Through extensive empirical experiments on the RoboTwin dataset, we demonstrate the potential of MCDP to improve both adaptability and performance. This exploration aims to provide valuable insights into the flexible composition of existing DPs, facilitating the development of generalizable cross-modality, cross-domain, and even cross-embodiment policies. Our code is open-sourced at https://github.com/AndyCao1125/MCDP.

Large language models (LLMs) have demonstrated strong potential and impressive performance in automating the generation and optimization of workflows. However, existing approaches are marked by limited reasoning capabilities, high computational demands, and significant resource requirements. To address these issues, we propose DebFlow, a framework that employs a debate mechanism to optimize workflows and integrates reflexion to improve based on previous experiences. We evaluated our method across six benchmark datasets, including HotpotQA, MATH, and ALFWorld. Our approach achieved a 3\% average performance improvement over the latest baselines, demonstrating its effectiveness in diverse problem domains. In particular, during training, our framework reduces resource consumption by 37\% compared to the state-of-the-art baselines. Additionally, we performed ablation studies. Removing the Debate component resulted in a 4\% performance drop across two benchmark datasets, significantly greater than the 2\% drop observed when the Reflection component was removed. These findings strongly demonstrate the critical role of Debate in enhancing framework performance, while also highlighting the auxiliary contribution of reflexion to overall optimization.