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We consider a finite-state, finite-action, infinite-horizon, discounted reward Markov decision process and study the bias and variance in the value function estimates that result from empirical estimates of the model parameters. We provide closed-form approximations for the bias and variance,...
Persistent link: https://www.econbiz.de/10009209247
We study a single product inventory system with nonnegative setup cost in which the demand is a continuous random variable but orders are restricted to be integer valued. Optimal policies, when there are no setup costs, have a nice form. However, we show that, when the setup costs are nonzero,...
Persistent link: https://www.econbiz.de/10009204172
Deciding who should receive a mail-order catalog is among the most important decisions that mail-order-catalog firms must address. In practice, the current approach to the problem is invariably myopic: firms send catalogs to customers who they think are most likely to order from that catalog. In...
Persistent link: https://www.econbiz.de/10009214289
Aseller in an online marketplace with an effective reputation mechanism should expect that dishonest behavior results in higher payments now whereas honest behavior results in a better reputation--and thus higher payments--in the future. We study the Window Aggregation Mechanism, a widely used...
Persistent link: https://www.econbiz.de/10009197538