Research

Paper

TESTING March 12, 2026

Stochastic Optimization and Coupling

Authors

Frank Yang, Kai Hao Yang

Abstract

We study optimization problems in which a linear functional is maximized over probability measures that are dominated by a given measure according to an integral stochastic order in an arbitrary dimension. We show that the following four properties are equivalent for any such order: (i) the test function cone is closed under pointwise minimum, (ii) the value function is affine, (iii) the solution correspondence has a convex graph with decomposable extreme points, and (iv) every ordered pair of measures admits an order-preserving coupling. As corollaries, we derive the extreme and exposed point properties involving integral stochastic orders such as multidimensional mean-preserving spreads and stochastic dominance. Applying these results, we generalize Blackwell's theorem by completely characterizing the comparisons of experiments that admit two equivalent descriptions -- through instrumental values and through information technologies. We also show that these results immediately yield new insights into information design, mechanism design, and decision theory.

Metadata

arXiv ID: 2603.11448
Provider: ARXIV
Primary Category: econ.TH
Published: 2026-03-12
Fetched: 2026-03-13 06:02

Related papers

Raw Data (Debug)
{
  "raw_xml": "<entry>\n    <id>http://arxiv.org/abs/2603.11448v1</id>\n    <title>Stochastic Optimization and Coupling</title>\n    <updated>2026-03-12T02:17:09Z</updated>\n    <link href='https://arxiv.org/abs/2603.11448v1' rel='alternate' type='text/html'/>\n    <link href='https://arxiv.org/pdf/2603.11448v1' rel='related' title='pdf' type='application/pdf'/>\n    <summary>We study optimization problems in which a linear functional is maximized over probability measures that are dominated by a given measure according to an integral stochastic order in an arbitrary dimension. We show that the following four properties are equivalent for any such order: (i) the test function cone is closed under pointwise minimum, (ii) the value function is affine, (iii) the solution correspondence has a convex graph with decomposable extreme points, and (iv) every ordered pair of measures admits an order-preserving coupling. As corollaries, we derive the extreme and exposed point properties involving integral stochastic orders such as multidimensional mean-preserving spreads and stochastic dominance. Applying these results, we generalize Blackwell's theorem by completely characterizing the comparisons of experiments that admit two equivalent descriptions -- through instrumental values and through information technologies. We also show that these results immediately yield new insights into information design, mechanism design, and decision theory.</summary>\n    <category scheme='http://arxiv.org/schemas/atom' term='econ.TH'/>\n    <category scheme='http://arxiv.org/schemas/atom' term='math.PR'/>\n    <published>2026-03-12T02:17:09Z</published>\n    <arxiv:comment>103 pages, 4 figures</arxiv:comment>\n    <arxiv:primary_category term='econ.TH'/>\n    <author>\n      <name>Frank Yang</name>\n    </author>\n    <author>\n      <name>Kai Hao Yang</name>\n    </author>\n  </entry>"
}