The risk function approach to profit maximizing estimation in direct mailing

Lars Muus, Hiek van der Scheer, Tom Wansbeek

    Research output: Working paperAcademic

    101 Downloads (Pure)

    Abstract

    When the parameters of the model describing consumers' reaction to a mailing are known, addresses for a future mailing can be selected in a profit-maximizing way. Usually, these parameters are unknown and are to be estimated. Standard estimation are based on a quadratic loss function. In the present context an alternative loss function is suggested by the mailing company's profit function. This leads to different estimators and higher expected profit.
    Original languageEnglish
    Publishers.n.
    Number of pages6
    Publication statusPublished - 1999

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