The New Era of Dynamic Pricing: Synergizing Supervised Learning and Quadratic Programming

2024/02/19 by Gustavo Bramao, Bramao, Gustavo, Ilia Tarygin +1
Economics, Econometrics and Finance · #Economic theories and models #FOS: Computer and information sciences #FOS: Mathematics #Machine Learning (cs.LG) #Optimization and Control (math.OC)

paper · pdf · doi:10.48550/arxiv.2402.14844

openalex publication_date 2024/02/19 · openalex created_date 2024/02/27 · openalex updated_date 2026/07/28

Abstract

In this paper, we explore a novel combination of supervised learning and quadratic programming to refine dynamic pricing models in the car rental industry. We utilize dynamic modeling of price elasticity, informed by ordinary least squares (OLS) metrics such as p-values, homoscedasticity, error normality. These metrics, when their underlying assumptions hold, are integral in guiding a quadratic programming agent. The program is tasked with optimizing margin for a given finite set target.

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