New Contextual Bandit Improves LLM Routing with Surrogate Rewards.

Ajay Narayanan Sridhar, Ronak Singh, Mehrdad Mahdavi, Vijaykrishnan Narayanan· July 13, 2026 View original

Summary

This paper introduces algorithms for contextual bandit problems with correlated arms and surrogate reward signals, specifically for Large Language Model (LLM) routing. The approach leverages auxiliary reward information to accelerate learning and offers robustness to surrogate misspecification, outperforming standard baselines.

Researchers have developed new algorithms for contextual bandit problems, specifically tailored for applications like Large Language Model (LLM) routing. Unlike traditional contextual bandits that assume conditional independence between "arms" (e.g., different LLMs or routing paths) and rely solely on direct feedback, this work addresses scenarios with correlated arms and access to auxiliary "surrogate" reward signals from machine learning models. The proposed methods leverage these surrogate rewards through two designs: a coupled reward-mixing approach that combines true and surrogate rewards for faster learning when surrogates are reliable, and a decoupled prediction-mixing approach. The decoupled method maintains separate estimators for bandit feedback and surrogate predictions, adaptively combining them to ensure robustness even if surrogate signals are noisy or inaccurate. Theoretical analysis provides regret guarantees, showing improved performance when surrogates are informative, while still matching reward-only bandit methods in worst-case scenarios. Empirical evaluations on LLM routing benchmarks demonstrate enhanced sample efficiency and better accuracy-cost trade-offs compared to existing contextual bandit and static routing methods.

Why it matters

This research provides a more sophisticated and efficient way to route requests to various LLMs or AI services, optimizing for both performance and cost in dynamic environments.

How to implement this in your domain

  1. 1Analyze current LLM routing strategies to identify opportunities for dynamic, context-aware optimization.
  2. 2Investigate the feasibility of generating surrogate reward signals from existing monitoring or performance prediction systems.
  3. 3Experiment with implementing correlation-aware contextual bandit algorithms for real-time LLM traffic management.
  4. 4Benchmark the accuracy, cost-efficiency, and latency of the new routing system against current static or simpler dynamic methods.

Who benefits

AI/ML DevelopmentCloud ComputingSoftware DevelopmentTelecommunicationsE-commerce

Key takeaways

  • New contextual bandit algorithms improve LLM routing by using correlated arms and surrogate rewards.
  • The approach leverages auxiliary ML model predictions to accelerate learning.
  • Decoupled prediction-mixing offers robustness to noisy or misspecified surrogate signals.
  • It achieves better sample efficiency and accuracy-cost trade-offs than standard baselines.

Original post by Ajay Narayanan Sridhar, Ronak Singh, Mehrdad Mahdavi, Vijaykrishnan Narayanan

"arXiv:2607.09015v1 Announce Type: cross Abstract: We study contextual bandit problems with correlated arms and access to surrogate reward signals produced by a machine learning model, motivated by applications such as large language model (LLM) routing. Unlike classical contextua…"

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Originally posted by Ajay Narayanan Sridhar, Ronak Singh, Mehrdad Mahdavi, Vijaykrishnan Narayanan on X · view source

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