Unverified Re-invented 2026

Cost per satisfied answer routing

Implementation & benchmark of arXiv:2608.23986 — The Shadow Price of Intelligence: Quality Degradation in LLM Inference as a Supply Chain Problem

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Source paper: The Shadow Price of Intelligence: Quality Degradation in LLM Inference as a Supply Chain Problem arXiv:2608.23986 · analyzed Aug 29, 2026

AI-generated research hypothesis, automatically tested. Not peer-reviewed.

Idea description

Replace nominal per-request serving cost with expected cost per satisfied answer, including geometric retry amplification, resident-context memory, and congestion penalties. A smaller model is selected only when its lower attempt cost remains favorable after accounting for its higher probability of failure and retry-induced occupancy.

Formulas

$$\tilde{S}_{j}=M_{j}\,\mathbf{E}[S_{j}]$$
$$q_j=d_j\rho,\qquad M_j=\frac{1}{1-q_j}=\frac{1}{1-d_j\rho},\qquad \tilde S_j=\frac{\mathbf{E}[S_j]}{1-d_j\rho}$$
$$c(k,N)=\gamma\bigl[k w_{0}+N\,\Delta w_{j}\bigr]+\gamma c_{m}N^{\kappa}+C_{\mathrm{SLA}}\left(\frac{(N-mk)^{+}}{mk}\right)^{\beta}$$
$$\mathrm{score}_j=\frac{M_j c^{\mathrm{attempt}}_j+\Delta c^{\mathrm{memory}}_j+\Delta c^{\mathrm{SLA}}_j}{1-q_j}$$

Mathematical statement

For tier j, S_j is the service time of one attempt, M_j is the expected retry multiplier, and E[S_j] is the mean attempt service time. The effective service time is tilde S_j = M_j E[S_j]. If q_j = d_j rho is the probability that an attempt causes another retry and q_j is less than one, geometric retrying gives M_j = 1 divided by (1 - q_j). The paper's instantaneous cost is c(k,N) = gamma [k w_0 + N Delta w_j] + gamma c_m N^kappa + C_SLA (((N - mk)^+) / (mk))^beta. Here gamma is electricity price, w_0 is idle server power, Delta w_j is active slot power, c_m N^kappa is resident-memory overhead, C_SLA is the congestion penalty coefficient, and beta is its exponent. Use the resulting marginal cost per satisfied answer as a routing score.

Implementation notes

Integrate this objective into a two-tier or multi-tier LLM router that chooses among models with different latency, correctness, and retry rates. For every tier j, measure mean attempt latency E[S_j], GPU energy or dollar cost per attempt c_attempt_j, and retry probability q_j. Estimate q_j with exponentially weighted counts of retries attributable to each tier, and clip it to at most 1 minus a small numerical constant. Compute M_j = 1 divided by (1 - q_j) and effective service time tilde S_j = M_j E[S_j]. For the current backlog N, calculate the marginal memory cost gamma c_m ((N + 1)^kappa - N^kappa), and calculate the finite-difference increase in SLA penalty using the paper's cost expression. Add expected retry-amplified compute cost, memory cost, and SLA cost, then divide by the estimated probability of obtaining a satisfactory answer. Enforce a minimum quality constraint, such as predicted correctness at least Q_min, and use small exploration probability so a tier does not become statistically unmeasurable. The mathematical quantities are the geometric multiplier and congestion cost; retry attribution, quality prediction, and cost estimates are empirical. Start with a 7B/1.5B pair on GSM8K, MMLU, or a replayed production-like prompt trace under fixed GPU capacity. Compare token-cost routing and latency-only routing. Measure dollars per correct answer, GPU-hours per satisfied answer, retry volume, KV-cache occupancy, queue length, and accuracy. The falsifiable hypothesis is that the small model's apparent cost advantage disappears during congestion once retries and resident-context costs are included.

Verification

This idea has not been verified yet.

Verification happens in two stages: Stage 1 — a mechanism check on a toy system confirms the claimed mathematical phenomenon reproduces; Stage 2 — a benchmark implements the idea on a real (small) neural network task and compares it against a tuned baseline over 8 paired seeds with a permutation test.

Artifacts

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