{
  "meta": {
    "product": "LateGate",
    "version": "eng-lock.v1",
    "notes": "Eng locked baseline: fixed premium per product, tiered payouts by traveler-selected threshold. Threshold minutes (tau) are INTERNAL only \u2014 never show in traveler UI. House is sole counterparty. Sell only when flight-level p_hat is under underwriting gates or house EV will be negative at pool rates.",
    "currency": "USD",
    "data_basis": "BTS Reporting Carrier OTP winter+summer month empirical; selective underwriting required"
  },
  "products": {
    "takeoff_delay": {
      "code": "TAKEOFF",
      "settlement_metric": "gate_departure_delay_minutes",
      "bts_field_proxy": "DepDelay",
      "definition": "Actual gate-out minus published scheduled departure (CRS). Not wheels-off.",
      "premium_cents": 1400,
      "premium_usd": 14.0
    },
    "arrival_delay": {
      "code": "ARRIVAL",
      "settlement_metric": "gate_arrival_delay_minutes",
      "bts_field_proxy": "ArrDelay",
      "definition": "Actual gate-in / block-in minus published scheduled arrival (CRS). Not wheels-on.",
      "premium_cents": 900,
      "premium_usd": 9.0
    }
  },
  "thresholds": {
    "internal_only": true,
    "ui_labels": {
      "30": "Short buffer",
      "45": "Medium buffer",
      "60": "Long buffer"
    },
    "minutes": [
      30,
      45,
      60
    ],
    "payouts_usd": {
      "30": 100,
      "45": 150,
      "60": 200
    },
    "payouts_cents": {
      "30": 10000,
      "45": 15000,
      "60": 20000
    },
    "rule": "Traveler selects one threshold per stub. Premium is FIXED for the product; payout B scales with selected threshold. Stub pays B if observed delay_minutes >= selected threshold; else 0. (Single-tier payout, not cumulative.)"
  },
  "load_and_edge": {
    "target_lambda": 1.45,
    "min_lambda_underwriting": 1.25,
    "adverse_selection_buffer": 0.2,
    "formula": "pi = lambda * E[payout] = lambda * p_hat(delay >= tau) * B(tau)",
    "house_ev_per_stub": "pi - p_hat * B",
    "note": "Locked pi is NOT equal to lambda*E[payout] at US pool-average p; lambda is enforced via underwriting gates on p_hat."
  },
  "underwriting_gates": {
    "description": "Refuse listing / HOT if flight-level p_hat exceeds these caps. Caps derived from locked pi, B, and target lambda.",
    "by_product_and_tau": {
      "TAKEOFF": {
        "30": {
          "p_max_lambda_1_45": 0.0966,
          "p_max_lambda_1_25": 0.112,
          "p_breakeven_lambda_1": 0.14
        },
        "45": {
          "p_max_lambda_1_45": 0.0644,
          "p_max_lambda_1_25": 0.0747,
          "p_breakeven_lambda_1": 0.0933
        },
        "60": {
          "p_max_lambda_1_45": 0.0483,
          "p_max_lambda_1_25": 0.056,
          "p_breakeven_lambda_1": 0.07
        }
      },
      "ARRIVAL": {
        "30": {
          "p_max_lambda_1_45": 0.0621,
          "p_max_lambda_1_25": 0.072,
          "p_breakeven_lambda_1": 0.09
        },
        "45": {
          "p_max_lambda_1_45": 0.0414,
          "p_max_lambda_1_25": 0.048,
          "p_breakeven_lambda_1": 0.06
        },
        "60": {
          "p_max_lambda_1_45": 0.031,
          "p_max_lambda_1_25": 0.036,
          "p_breakeven_lambda_1": 0.045
        }
      }
    },
    "clean_demo_prior": {
      "p30": 0.08,
      "p45": 0.05,
      "p60": 0.035,
      "expected_house_ev": {
        "TAKEOFF": {
          "30": 6.0,
          "45": 6.5,
          "60": 7.0
        },
        "ARRIVAL": {
          "30": 1.0,
          "45": 1.5,
          "60": 2.0
        }
      }
    },
    "pool_average_prior_bts_2024_jan_jul": {
      "TAKEOFF": {
        "30": 0.1833,
        "45": 0.1361,
        "60": 0.105
      },
      "ARRIVAL": {
        "30": 0.1866,
        "45": 0.1383,
        "60": 0.1069
      },
      "warning": "Using pool priors with locked pi yields negative house EV \u2014 do not price random flights."
    }
  },
  "inventory": {
    "stubs_per_flight_per_product_default": 10,
    "stubs_per_flight_per_product_min": 3,
    "stubs_per_flight_per_product_max": 20,
    "stubs_per_flight_per_product_demo": 5,
    "fomo_copy": "Limited stubs on this flight",
    "max_payout_exposure_per_flight_product_usd": 2000,
    "note": "max exposure \u2248 inventory_cap * max(B) = inventory * 200; default 10 => $2000"
  },
  "portfolio_exposure_limits": {
    "max_net_payout_exposure_per_airport_day_usd": 25000,
    "max_net_payout_exposure_per_airline_day_usd": 40000,
    "max_net_payout_exposure_book_day_usd": 150000,
    "weather_watch_airport_multiplier": 0.35,
    "correlation_cluster_cap_usd": 15000,
    "description": "Hard caps on simultaneous open stub max-payout exposure. Weather watch airports reduce remaining capacity by multiplier."
  },
  "refusal_codes": {
    "HOT": {
      "code": "HOT",
      "meaning": "Flight risk elevated vs underwriting prior (delay already developing, weather watch, or p_hat above soft warn).",
      "action": "Refuse new purchases; existing stubs remain."
    },
    "CUTOFF": {
      "code": "CUTOFF",
      "meaning": "Past purchase deadline relative to scheduled departure.",
      "default_hours_before_std": 4,
      "demo_hours_before_std": 6,
      "action": "Refuse new purchases."
    },
    "FULL": {
      "code": "FULL",
      "meaning": "Inventory stubs for this flight/product exhausted.",
      "action": "Refuse new purchases."
    },
    "DUPLICATE": {
      "code": "DUPLICATE",
      "meaning": "Same user already holds an open stub for this flight+product (or same itinerary).",
      "max_stubs_per_user_per_flight_product": 1,
      "action": "Refuse."
    },
    "EXPOSURE_CAP": {
      "code": "EXPOSURE_CAP",
      "meaning": "Portfolio or cluster exposure limit would be exceeded.",
      "action": "Refuse."
    },
    "UNDERWRITE_REJECT": {
      "code": "UNDERWRITE_REJECT",
      "meaning": "Flight-level p_hat exceeds p_max for selected product/tau at target lambda.",
      "action": "Do not list or refuse purchase."
    },
    "CANCELLED": {
      "code": "CANCELLED",
      "meaning": "Flight cancelled \u2014 stub rules: refund premium (recommended MVP) or separate cancel product.",
      "mvp_settlement": "refund_premium"
    },
    "DIVERTED": {
      "code": "DIVERTED",
      "meaning": "Diversion \u2014 Arrival product: treat as trigger at max B or manual review; Takeoff may still settle on gate-out delay.",
      "mvp_settlement": "arrival_pay_max_B_or_review"
    }
  },
  "settlement": {
    "primary_sources_mvp": [
      "BTS_ASQP_proxy_delayed",
      "partner_flight_status_api"
    ],
    "production_preferred": [
      "Cirium",
      "OAG",
      "airline_direct"
    ],
    "takeoff_observe_after": "actual_gate_out_or_std_plus_tau_plus_buffer",
    "arrival_observe_after": "actual_gate_in_or_sta_plus_tau_plus_buffer",
    "observation_buffer_minutes": 30,
    "dispute_window_hours": 72,
    "auto_pay_if": "source_confidence >= high AND delay_minutes >= tau",
    "hold_for_review_if": "source_conflict OR diversion OR gate_return"
  },
  "traveler_safe_wording": {
    "avoid": [
      "insurance",
      "gamble",
      "bet",
      "odds",
      "policy",
      "claim",
      "premium (in UI)",
      "actuarial"
    ],
    "prefer": [
      "stub",
      "payout",
      "delay cushion",
      "flight credit-style protection",
      "locked price",
      "limited stubs"
    ],
    "never_show_in_ui": [
      "tau",
      "threshold minutes as underwriting jargon",
      "lambda",
      "house edge",
      "p_hat"
    ]
  },
  "future_depositor_pool": {
    "enabled": false,
    "concept": "Depositors post capital; house edge (lambda - 1) can be shared after reserve; depositors inherit residual after traveler payouts and ops fee.",
    "suggested_split_of_edge": {
      "house_ops_fee": 0.4,
      "depositor_yield": 0.5,
      "reserve": 0.1
    }
  }
}