When Do We Need LLMs? A Diagnostic for Language-Driven Bandits

We study Contextual Multi-Armed Bandits (CMABs) for non-episodic sequential decision making problems where the context includes both textual and numerical information (e.g., recommendation systems, dynamic portfolio adjustments, offer selection; all frequent problems in finance). While Large Language Models (LLMs) are increasingly applied to these settings, utilizing LLMs for reasoning at every decision step is computationally expensive and uncertainty estimates are difficult to obtain. To address this, we introduce LLMP-UCB, a bandit algorithm that derives uncertainty estimates from LLMs via repeated inference. However, our experiments demonstrate that lightweight numerical bandits operating on text embeddings (dense or Matryoshka) match or exceed the accuracy of LLM-based solutions at a fraction of their cost. We further show that embedding dimensionality is a practical lever on the exploration-exploitation balance, enabling cost--performance tradeoffs without prompt complexity. Finally, to guide practitioners, we propose a geometric diagnostic based on the arms' embedding to decide when to use LLM-driven reasoning versus a lightweight numerical bandit. Our results provide a principled deployment framework for cost-effective, uncertainty-aware decision systems with broad applicability across AI use cases in financial services.

Beyond Manual Planning: Seating Allocation for Large Organizations

We introduce the Hierarchical Seating Allocation Problem (HSAP) which addresses the optimal assignment of hierarchically structured organizational teams to physical seating arrangements on a floor plan. This problem is driven by the necessity for large organizations with large hierarchies to ensure that teams with close hierarchical relationships are seated in proximity to one another, such as ensuring a research group occupies a contiguous area. Currently, this problem is managed manually leading to infrequent and suboptimal replanning efforts. To alleviate this manual process, we propose an end-to-end framework to solve the HSAP. A scalable approach to calculate the distance between any pair of seats using a probabilistic road map (PRM) and rapidly-exploring random trees (RRT) which is combined with heuristic search and dynamic programming approach to solve the HSAP using integer programming. We demonstrate our approach under different sized instances by evaluating the PRM framework and subsequent allocations both quantitatively and qualitatively.