Contingent Exposure Routing for Financial AI: Outage Risk and the Cost of Indivisible Decisions

Excerpt

arXiv:2610.00239v1 Announce Type: new Abstract: Model failover restores availability, but changes which financial institutions share decision errors. We formulate outage-contingent routing through a local market-impact response matrix and study expected squared price displacement. A symmetric construction shows that a shared backup can leave an order-one concentration floor as the number of primary endpoints grows, while balanced fallback risk decreases inversely with the surviving endpoint coun