Albion College

Mathematics and Computer Science

Mathematics and Computer Science

COLLOQUIUM

Stochastic Optimal Control Models for Online Stores

Albert Cohen

We present a model for the optimal design of an online auction/store by
a seller. The framework we use is a stochastic optimal control problem. In
our setting, the seller wishes to maximize her average wealth level, where
she can control her price per unit via her reputation level. The corresponding
Hamilton-Jacobi-Bellmann equation is analyzed for an introductory case,
and pulsing advertising strategies are recovered for resource allocation.

Paper is available on ArXiv at http://arxiv.org/pdf/1103.1918.pdf

Paper is available on ArXiv at http://arxiv.org/pdf/1103.1918.pdf