P recommendation models are key tools in customer relationship management (CRM). This study develops a product recommendation model based on the principle that customer preference similarity stemming from prior purchase behavior is a key element in predicting current product purchase. The proposed recommendation model is dependent on two complementary methodologies: joint space mapping (placing...

A heavily used competitive tactic in the grocery business is the weekly advertising of price reductions in newspaper inserts and store fliers. Store managers commonly believe that advertisements of price reductions and loss leaders help to build store traffic by diverting customers from competing stores, thereby increasing store volume and profitability. It is therefore not surprising that groc...

We consider a market where a single seller must employ informative advertising to launch a new product of observable quality. The monopolist may use mass, targeted or customer directed advertising. We show that the choice of advertising strategy depends on the economic properties of the advertising technology. If this exhibits strong economies of targeting, customer directed advertising arises ...

Based on a large-scale, unique longitudinal dataset comprising more than 4m transactions, I first investigate drivers of customers’ point of sale choice (online vs. counter PoS). Second, I study which PoS yields higher purchase decision quality. I establish whether linkages hold across different customer segments and pricing contexts, and examine consumers’ learning effects over time. Third, I ...

This paper considers a seat inventory control problem in which flights depart sequentially and passengers purchase available seats depending on customer choice behavior. Customer choice behavior can lead to either a horizontal shift or a booking loss when a desired fare class is unavailable. This problem is mathematically challenging and intractable via exact mathematical models. As an alternat...

The enhancement of existing relationships is of pivotal importance to companies, since attracting new customers is known to be more expensive. Therefore, as part of their customer relationship management (CRM) strategy, many researchers have been analyzing “why” customers decide to switch. However, despite its practical relevance, few studies have investigated how companies can react to defecti...

In recent years, sustainable mobility policy analysis has used Hybrid Choice Models (HCM) by incorporating latent variables in the mode choice models. However, impact on outcomes not yet been determined with certainty. This paper aims to measure effect of HCM compared traditional models without variables. To this end, we performed research city Santander, Spain. We identified two variables—Safe...

We consider revenue management models for pricing a product line with several customer segments, working under the assumption that every customer’s product choice is determined entirely by their reservation price. We model the customer choice behavior by several probabilistic choice models and formulate the problems as mixed-integer programming problems. We study special properties of these for...

The choice network revenue management model incorporates customer purchase behavior as a function of the offered products, and is the appropriate model for airline and hotel network revenue management, dynamic sales of bundles, and dynamic assortment optimization. The optimization problem is a stochastic dynamic program and is intractable. A certainty-equivalence relaxation of the dynamic progr...

The choice network revenue management model incorporates customer purchase behavior as a function of the offered products, and is the appropriate model for airline and hotel network revenue management, dynamic sales of bundles, and dynamic assortment optimization. The optimization problem is a stochastic dynamic program and is intractable, and a linear program approximation called choice determ...