Apr 28, 2026 · econ.EMJ/K move · Enter open · S save
Nilavra Pathak, Olivier Jeunen, Eric Lambert
Expedia Group · New York, USA · aampe · Antwerp, Belgium · Seattle, USA
Organizations routinely make strategic budget allocations under operational constraints, but often lack a principled way to assess whether realized allocations were close to the best feasible choices in hindsight. We present a retrospective auditing framework based on hindsight regret, defined as the opportunity cost of the realized allocation relative to a constraint-faithful benchmark under the same budget and stability guardrails. The framework estimates regime-specific spend--response functions from historical logs, computes feasible hindsight allocations via constrained optimization, and propagates uncertainty through Monte Carlo evaluation to produce regret distributions, expected lift, and probability-of-improvement summaries. This separates allocation inefficiency from uncertainty in the estimated response surfaces. Experiments on real marketing allocation logs show that the framework yields interpretable post-hoc diagnostics and reveals a practical trade-off between allocation flexibility and detectability: moderate feasible reallocations often capture most measurable gain, while larger shifts move into weak-support regions with higher uncertainty. The result is a practical method for auditing historical budget decisions when online experimentation is costly or infeasible.