Neural Supervised Clustering for Learning Individualized Treatment Rules with Many Treatments

arXiv:2610.19104v1 Announce Type: cross Abstract: Learning an individualized treatment rule (ITR) with many treatments requires estimating treatment-specific effects from limited observations per arm. Treatments with similar conditional responses can share information, but linear contrast models may miss nonlinear heterogeneity. We propose nonlinear supervised clustering fusion (NSCF), a neural Q-learning framework with a shared nonlinear covariate representation and low-dimensional treatment embeddings. Pairwise fusion groups treatments with similar learned contrasts, yielding an ITR and an interpretable partition. An alternating algorithm combines neural training, embedding fusion, validation-based partition selection, and unpenalized grouped refitting. NSCF lowers regret relative to a strong neural reference in nonlinear exact-sharing simulations; perturbations characterize the limits of hard sharing. In a melanoma xenograft application, NSCF improves average policy value over the neural reference. These results support nonlinear representation learning with supervised treatment fusion when treatment effects exhibit shared structure.