Bandit Profit-maximization for Targeted Marketing

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Tác giả: Joon Suk Huh, Kirthevasan Kandasamy, Ellen Vitercik

Ngôn ngữ: eng

Ký hiệu phân loại: 799.3 Shooting other than game

Thông tin xuất bản: 2024

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 201847

Comment: The Twenty-Fifth ACM Conference on Economics and Computation (EC'24)We study a sequential profit-maximization problem, optimizing for both price and ancillary variables like marketing expenditures. Specifically, we aim to maximize profit over an arbitrary sequence of multiple demand curves, each dependent on a distinct ancillary variable, but sharing the same price. A prototypical example is targeted marketing, where a firm (seller) wishes to sell a product over multiple markets. The firm may invest different marketing expenditures for different markets to optimize customer acquisition, but must maintain the same price across all markets. Moreover, markets may have heterogeneous demand curves, each responding to prices and marketing expenditures differently. The firm's objective is to maximize its gross profit, the total revenue minus marketing costs. Our results are near-optimal algorithms for this class of problems in an adversarial bandit setting, where demand curves are arbitrary non-adaptive sequences, and the firm observes only noisy evaluations of chosen points on the demand curves. For $n$ demand curves (markets), we prove a regret upper bound of $\tilde{O}(nT^{3/4})$ and a lower bound of $\Omega((nT)^{3/4})$ for monotonic demand curves, and a regret bound of $\tilde{\Theta}(nT^{2/3})$ for demands curves that are monotonic in price and concave in the ancillary variables.
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