Neural Supervised Clustering for Learning Individualized Treatment Rules with Many Treatments

Daixi Huang, Yixin Yuan, Yifan Dai, Yufeng Liu

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.