OC-OPD: Observation-coordinated Supervision for On-Policy Distillation

Abstract

Reverse and forward Kullback--Leibler (KL) divergences provide complementary supervision in on-policy distillation: reverse KL refines the student's active token rankings, and forward KL allocates mass to teacher-supported candidates. At student-generated prefixes, we form a four-observation matrix by treating the student and teacher as both candidate sources and evaluators. The diagonal self-observations measure uncertainty, while source-centered cross-observations recover the two KL objectives. We establish an exact identity equating the Fisher inverse-metric coupling of their logit gradients with the sum of these contrasts, yielding a common local descent direction for distinct positive distributions. Observation-coordinated on-policy distillation (OC-OPD) uses observations to set preferences, closed-form bargaining to coordinate gradients, and distributional discrepancy to scale the update. Across three heterogeneous student settings (non-thinking generation, thinking generation, and base-model initialization), OC-OPD achieves strong gains in mathematical reasoning and transfers effectively to out-of-distribution scientific question answering and code generation. Our code is publicly available at: https://github.com/RuoranXu/OC-OPD.