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This research proposes a dynamic procurement platform using reverse second-price auctions to optimize LLM inference costs while maintaining quality thresholds. By routing queries to the most competitive providers based on real-time cost-to-serve estimates, the system reveals significant inefficiencies in current fixed-price markets and offers substantial potential savings for end-users.
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Learning the Cost of Reliable Inference

arXiv3 min read

arXiv:2609.28322v1 Announce Type: cross Abstract: Benchmarking and routing platforms increasingly act as intermediaries connecting large language model providers with end-users. However, providers on these platforms typically use a fixed price per token, preventing users from achieving the most competitive price for their tasks. % workloads. In this work, we design a procurement platform where token prices for each task are driven by provider competition, enabling users to secure competitive pricing for guaranteed quality levels. To this end, the platform sequentially routes queries via a reverse second-price auction that incentivizes model providers to truthfully bid their best estimate of the average cost to serve a user's query. As it routes queries, the platform learns the quality offered by each provider and progressively routes queries to the most cost-competitive provider among those meeting a desired quality threshold. To validate our design, we conduct experiments with multiple LLMs from the \texttt{Llama} and \texttt{Qwen} families on popular mathematical reasoning and question-answering benchmarks. The results show that the pricing margin of the most cost-competitive provider on our platform varies significantly---from $10\%$ to $71\%$---depending on the task and quality threshold. This suggests a substantial inefficiency in the current fixed-price market, and it demonstrates that our platform may enable users to capture maximum savings whenever competitive market conditions permit.

Abstract:Benchmarking and routing platforms increasingly act as intermediaries connecting large language model providers with end-users. However, providers on these platforms typically use a fixed price per token, preventing users from achieving the most competitive price for their tasks. % workloads. In this work, we design a procurement platform where token prices for each task are driven by provider competition, enabling users to secure competitive pricing for guaranteed quality levels. To this end, the platform sequentially routes queries via a reverse second-price auction that incentivizes model providers to truthfully bid their best estimate of the average cost to serve a user's query. As it routes queries, the platform learns the quality offered by each provider and progressively routes queries to the most cost-competitive provider among those meeting a desired quality threshold. To validate our design, we conduct experiments with multiple LLMs from the \texttt{Llama} and \texttt{Qwen} families on popular mathematical reasoning and question-answering benchmarks. The results show that the pricing margin of the most cost-competitive provider on our platform varies significantly---from $10\%$ to $71\%$---depending on the task and quality threshold. This suggests a substantial inefficiency in the current fixed-price market, and it demonstrates that our platform may enable users to capture maximum savings whenever competitive market conditions permit.

Artificial Intelligence (cs.AI); Computer Science and Game Theory (cs.GT); Machine Learning (cs.LG)

arXiv:2609.28322 [cs.AI]

(or arXiv:2609.28322v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2609.28322 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

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Full text under the publisher's open licence · 310 words

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