{"50759":{"#nid":"50759","#data":{"type":"event","title":"Dynamic policies to learn and earn in a customized pricing context","body":[{"value":"\u003Cp\u003E\u003Cstrong\u003ETITLE:\u003C\/strong\u003E Dynamic policies to learn and earn in a customized pricing context\u003C\/p\u003E\u003Cp\u003E\u003Cstrong\u003ESPEAKER:\u003C\/strong\u003E J. Michael Harrison\u003C\/p\u003E\u003Cp\u003E\u003Cstrong\u003EABSTRACT:\u003C\/strong\u003E\u003C\/p\u003E\u003Cp\u003EMotivated\nby applications in financial services, we consider the following customized\npricing problem.\u0026nbsp; A seller of some good\nor service (like auto loans or small business loans) confronts a sequence of\npotential customers numbered 1, 2, \u2026 , \u003Cem\u003ET\u003C\/em\u003E.\u0026nbsp; These customers are drawn at random from a\npopulation characterized by a price-response function r(\u003Cem\u003Ep\u003C\/em\u003E).\u0026nbsp; That is, if the seller offers price \u003Cem\u003Ep\u003C\/em\u003E, then the probability of a successful\nsale is r(\u003Cem\u003Ep\u003C\/em\u003E).\u0026nbsp; The profit realized from\na successful sale is p(\u003Cem\u003Ep\u003C\/em\u003E) = \u003Cem\u003Ep \u003C\/em\u003E\u2013 \u003Cem\u003Ec\u003C\/em\u003E, where \u003Cem\u003Ec\u003C\/em\u003E \u0026gt; 0 is known.\u0026nbsp; \u003C\/p\u003E\n\n\u003Cp\u003E\u0026nbsp;If\nthe price-response function r(\u00d7) were also known, then\nthe problem of finding a price \u003Cem\u003Ep\u003C\/em\u003E* to\nmaximize r(\u003Cem\u003Ep\u003C\/em\u003E)p(\u003Cem\u003Ep\u003C\/em\u003E) would be simple, and the\nseller would offer price \u003Cem\u003Ep\u003C\/em\u003E* to each\nof the \u003Cem\u003ET\u003C\/em\u003E customers.\u0026nbsp; We consider the more complicated case where r(\u00d7) is fixed but initially unknown: roughly speaking, the seller wants to\nchoose prices sequentially so as to maximize the total profit earned from the \u003Cem\u003ET\u003C\/em\u003E potential customers; each successive\nchoice involves a trade-off between refined estimation of the unknown\nprice-response function (learning) and immediate profit (earning).\u003C\/p\u003E\n\n\u003Cp\u003E\u0026nbsp;*\nJoint work with Bora Keskin and Assaf Zeevi\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"Dynamic policies to learn and earn in a customized pricing context","format":"limited_html"}],"field_summary_sentence":[{"value":"Dynamic policies to learn and earn in a customized pricing context"}],"uid":"27187","created_gmt":"2010-02-01 11:58:58","changed_gmt":"2016-10-08 01:49:35","author":"Anita Race","boilerplate_text":"","field_publication":"","field_article_url":"","field_event_time":{"event_time_start":"2010-02-18T10:00:00-05:00","event_time_end":"2010-02-18T11:00:00-05:00","event_time_end_last":"2010-02-18T11:00:00-05:00","gmt_time_start":"2010-02-18 15:00:00","gmt_time_end":"2010-02-18 16:00:00","gmt_time_end_last":"2010-02-18 16:00:00","rrule":null,"timezone":"America\/New_York"},"extras":[],"groups":[{"id":"1242","name":"School of Industrial and Systems Engineering (ISYE)"}],"categories":[],"keywords":[{"id":"2498","name":"profit"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[{"id":"1795","name":"Seminar\/Lecture\/Colloquium"}],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[],"email":[],"slides":[],"orientation":[],"userdata":""}}}