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Stochastic Optimization in Dynamic Environments : with applications in e-commerce

<p>In this thesis we address the problem of how to construct an optimal algorithm for displaying banners (i.e advertisements shown on web sites). The optimization is based on the revenue each banner generates, with the aim of selecting those banners which maximize future total revenue. Banner optimality is of major importance in the e-commerce industry, in particular on web sites with heavy traffic. The 'micropayments' from showing banners add up to substantial profits due to the large volumes involved. We provide a broad, up-to-date and primarily theoretical treatment of this global optimization problem. Through a synthesis of mathematical modeling, statistical methodology and computer science we construct a stochastic 'planning algorithm'. The superiority of our algorithm is based on empirical analysis conducted by us on real internet-data at TradeDoubler AB, as well as test-results on a selection of stylized data-sets. The algorithm is flexible and adapts well to new environments.</p>

Identiferoai:union.ndltd.org:UPSALLA/oai:DiVA.org:liu-8509
Date January 2007
CreatorsBastani, Spencer, Andersson, Olov
PublisherLinköping University, Department of Mathematics, Linköping University, Department of Mathematics, Matematiska institutionen
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, text

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