financial model developers

Abstract: Classical theory predicts that irrational traders lose money to rational traders and are eventually driven out of the market. Yet noise trading, herding, and heuristic trading persist even in highly developed markets. We model a financial market as an ecology of two trading-behavior types, relatively rational (R) and boundedly rational (N), whose composition evolves under replicator dynamics according to relative performance. Each type's fitness depends on the share of the other type and on frictions. When the interaction is complementary, that is, rational traders profit from the mispricing created by boundedly rational traders while the latter benefit from the liquidity and price correction supplied by the former, and when the difference in frictions is moderate, a unique interior composition exists and is globally asymptotically stable: bounded rationality persists endogenously. When the interaction is antagonistic, the same point becomes a tipping threshold between two one-type regimes. Comparative statics show that lowering the costs of disciplined trading, as algorithmic and AI-based trading does, shifts the composition toward rational trading continuously but does not eliminate bounded rationality unless the cost advantage exceeds an explicit threshold.

Abstract: Large Language Models (LLMs) have demonstrated remarkable success in complex reasoning through explicit Chain-of-Thought (CoT), but the associated computational overhead and token verbosity remain significant barriers to efficiency. While implicit reasoning in continuous latent spaces offers a promising alternative, existing methods like Coconut and CODI often rely on fixed-length latent sequences and suffer from representational collapse. In this paper, we propose Sep-Latent, an adaptive implicit reasoning framework that utilizes separator tokens as structural semantic anchors. By introducing an Attention-Decay mechanism, we force the model to aggregate and compress reasoning logic into these anchors during training. We then align explicit and implicit pathways through multi-level distillation across all layers to ensure logical consistency. Crucially, Sep-Latent enables dynamic reasoning depth by adaptively terminating the latent thinking phase based on query complexity. Experimental results on the GSM8k-Aug benchmark show that Sep-Latent achieves an accuracy of 56.8\% with an average of only 5.4 tokens, significantly outperforming prior fixed-length implicit models in efficiency while narrowing the performance gap with explicit CoT. Further analysis via PCA and symbolic variant testing confirms that our method ensures semantic grounding and exhibits superior robustness to perturbations.

Abstract: Representer explanations rank the training landmarks that most influence a self-supervised representation. At scale, this ranking rests on up to four stacked approximations of the empirical neural tangent kernel (eNTK). These are random output heads, a parameter sketch, landmark sampling and a coefficient fit. Existing analyses bound each approximation separately, but none certifies the top-$K$ set against their combined error. We introduce CAIRN (Certified Approximation for Interpretable Representer laNdmarks), a framework that carries this error through to the ranking. We derive the exact variance of the sketched multi-head eNTK, which matches measurement within $4\%$ where Johnson-Lindenstrauss bounds err by up to $2.5\times$. This yields a high-probability top-$K$ certificate for a fixed coefficient fit, alongside exact residual-trace certificates for discarded spectral mass. An exact product-variance identity separates kernel error from fit variability and identifies when a larger kernel budget can still sharpen a ranking. Stochastic Lanczos Quadrature (SLQ) estimates the effective dimension within $0.72\%$ and guides the landmark budget without dense eigendecomposition. We show that residual mass does not control class coverage, and residual-greedy selection cuts the worst coverage excess of $k$-means++ from $8.5\times$ to $1.55\times$ ($4\times$ on the sketched eNTK). Cross-view initializers outperform principal-component initialization in five (AUI) to all six (CSI) settings. Against the KREPES Gauss-Newton solver, CAIRN converges $2.5$ to $11.3\times$ faster, trails by at most $0.31$ points and gains up to $3.14$ points on MNIST. Together, these results make the reliability of representer explanations measurable and show where approximation budgets are best spent.

Abstract: While symbolic regression (SR) has been successfully used in science to discover new equations, its use in financial valuation is hindered by several limitations. Whereas the natural sciences provide objectively correct relationships, financial valuation constitutes a distinct class of symbolic discovery problems, as it admits multiple valid perspectives, operates under non-stationary market conditions, and involves noisy, continuous performance signals. In this work, we propose Multi-Agent Fundamental Analysis with Symbolic Adaptive learning (MUFASA), a hierarchical multi-agent framework for symbolic discovery in finance. MUFASA introduces (1) disentangled equation discovery via specialized agents representing distinct valuation perspectives, (2) a meta-coordinator that performs hierarchical-level reasoning over market context information, and (3) a memory mechanism that reasons over statistical performance summaries (e.g., accuracy, stability, and tail risk) to guide learning under noisy feedback. Experiments across datasets from multiple countries show that MUFASA achieves state-of-the-art performance on the valuation task compared to classical finance methods, financial large language models, and SR approaches, while simultaneously producing interpretable equations, which we share with the community. We also make publicly available the distilled learnings across evolution iterations and context-dependent strategy weights, which might offer useful insights for future research on financial fundamental analysis.

Abstract: Time series foundation models (TSFMs) are increasingly pre-trained on synthetically generated time series trajectories, where the data generating process is known. Current pre-training recipes are based on loss objectives which compare TSFM outputs to realized future values of each trajectory. We instead propose loss objectives which compare TSFM outputs to the conditional forecast distribution of each trajectory, a procedure we call synthetic data distillation (SDD). SDD corresponds to a Rao-Blackwellization of the training objective, in that it leaves the expectation of stochastic gradients unchanged while provably reducing the covariance of the stochastic gradient under the Loewner partial ordering. We empirically validate SDD on a TSFM model family of sizes from $4$M to $2.5$B parameters, and observe faster convergence of validation loss at every model size: on Gaussian Process data, SDD attains or improves upon the Status Quo loss whilst requiring $10\%-40\%$ less training iterations.