New Bandit Algorithms Optimize LLM Routing with Surrogate Rewards.

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

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Summary

This paper introduces novel contextual bandit algorithms that leverage surrogate reward signals and account for inter-arm correlations to optimize Large Language Model (LLM) routing. These methods improve sample efficiency and achieve better accuracy-cost trade-offs compared to standard baselines, even with noisy or misspecified surrogates.

Optimizing the routing of requests to various Large Language Models (LLMs) is a critical challenge, especially when considering trade-offs between accuracy and computational cost. Traditional contextual bandit approaches typically assume conditional independence between "arms" (e.g., different LLMs or configurations) and rely solely on direct bandit feedback. However, in real-world LLM routing, arms can be correlated, and auxiliary information, such as surrogate reward signals from a cheaper, less accurate model, might be available but potentially noisy or misspecified. This research addresses these complexities by proposing new contextual bandit algorithms designed for scenarios with correlated arms and access to surrogate rewards. Two main designs are introduced: a coupled reward-mixing approach and a decoupled prediction-mixing approach. The coupled method combines true and surrogate rewards to accelerate learning when surrogates are reliable. The decoupled prediction-mixing approach, on the other hand, maintains separate estimators for bandit feedback and surrogate rewards, adaptively combining their predictions. This decoupling provides robustness against misspecified surrogates, ensuring that in the worst case, regret guarantees are comparable to reward-only bandit methods. Crucially, it achieves improved regret when surrogate predictions are sufficiently informative. Theoretical analyses support these claims, and experiments on LLM routing benchmarks demonstrate enhanced sample efficiency and consistently better accuracy-cost trade-offs compared to standard contextual bandit baselines and static routing methods.

Why it matters

Professionals managing LLM deployments can significantly improve the efficiency and cost-effectiveness of their systems by intelligently routing requests, ensuring optimal performance while minimizing resource consumption.

How to implement this in your domain

  1. 1Analyze current LLM routing strategies for potential inefficiencies or suboptimal cost-accuracy trade-offs.
  2. 2Implement contextual bandit algorithms that incorporate surrogate reward signals for dynamic LLM selection.
  3. 3Experiment with both coupled reward-mixing and decoupled prediction-mixing approaches to find the best fit for specific LLM routing scenarios.
  4. 4Monitor and evaluate the sample efficiency and accuracy-cost trade-offs achieved by the new routing algorithms.

Who benefits

AI/ML PlatformsCloud ComputingSoftware DevelopmentCustomer ServiceTelecommunications

Key takeaways

  • New contextual bandit algorithms optimize LLM routing using surrogate rewards.
  • They account for inter-arm correlations, improving efficiency.
  • Decoupled prediction-mixing offers robustness to noisy surrogate signals.
  • The methods achieve better accuracy-cost trade-offs than baselines.

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

"arXiv:2607.09015v1 Announce Type: new 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 contextual…"

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

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