mlsanityData to 7 Oct 2026

Market-Alignment Risk in Pricing Agents: Trace Diagnostics and Trace-Prior RL under Hidden Competitor State

arXiv 2605.06529 ↗First posted 7 May 2026cs.AI cs.LGcited by 1

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Abstract (arXiv)

Outcome metrics can certify the wrong behavior. We study this failure in a two-hotel revenue-management simulator where Hotel A trains an agent against a fixed rule-based revenue-management competitor, Hotel B. A standard learning agent can obtain near-reference revenue per available room (RevPAR) while failing to learn market-like yield management: it sells too aggressively, undercuts, or collapses to modal price buckets. We diagnose this as a Goodhart-style failure under partial observability. Hotel A cannot observe the competitor's remaining inventory, booking curve, or pricing rule, so the same Hotel A-visible state maps to multiple plausible Hotel B prices. Deterministic value-based RL and deterministic copying collapse this unresolved uncertainty into shortcut behavior. We introduce a trace-level diagnostic protocol using RevPAR, occupancy, ADR, full price-bucket distributions, L1/JS distances, and seed-level confidence intervals. The verified repair is Trace-Prior RL: learn a distributional market prior from lagged market traces, then train a stochastic pricing policy with a RevPAR reward and a KL penalty to the learned prior. The final policy matches Hotel B's RevPAR, occupancy, ADR, and price distribution within seed-level uncertainty, while still optimizing Hotel A's own reward. We argue that the contribution is not a new optimizer and not a hotel-pricing leaderboard, but a reproducible failure-and-repair recipe for agentic systems where scalar rewards are easy to game and the intended behavior is only visible in traces. A key finding is that higher exact action accuracy can worsen aggregate trace alignment when the target is distributional.

Key facts. Cited by 1 paper in the map (data through 7 Oct 2026). Builds on 8 of its 16 references that are in the map. First posted on arXiv 7 May 2026.

Builds on

8 of 16 references.

References · 8

  1. 2020Conservative Q-Learning for Offline Reinforcement Learningcited by 1,777
  2. 2018Off-Policy Deep Reinforcement Learning without Explorationcited by 1,227
  3. 2019Behavior Regularized Offline Reinforcement Learningcited by 654
  4. 2020AWAC: Accelerating Online Reinforcement Learning with Offline Datasetscited by 647
  5. 2018Maximum a Posteriori Policy Optimisationcited by 318
  6. 2022The Effects of Reward Misspecification: Mapping and Mitigating Misaligned Modelscited by 312
  7. 2019Way Off-Policy Batch Deep Reinforcement Learning of Implicit Human Preferences in Dialogcited by 283
  8. 2017Distral: Robust Multitask Reinforcement Learningcited by 231

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Citing papers per year: 2026: 1.

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  1. 2026Representation Signatures and Risk-Feedback Alignment in LLM Trading Agents
  2. 2025Profit Mirage: Revisiting Information Leakage in LLM-based Financial Agents
  3. 2026PredictionMarketBench: A SWE-bench-Style Framework for Backtesting Trading Agents on Prediction Markets
  4. 2026Faithful yet Collusive: Why Chain-of-Thought Monitoring Cannot Detect Collusion in LLM Pricing Agents under Oligopolistic Competition
  5. 2026TimeSeek: Temporal Reliability of Agentic Forecasters
  6. 2026When Aggregate Alignment Misleads: Auditing Policy Repair Without Per-State Expert Actions
  7. 2026Agent Bazaar: Enabling Economic Alignment in Multi-Agent Marketplaces
  8. 2026PriceBench: A Diagnostic Benchmark for Price, Quality, and Brand Preferences in LLM Booking Agents