Abstract: Spatial price integration is extensively studied in commodity markets as a means of examining the degree of integration between regions of a geographically diverse market. In many markets, the market is bound together by a well-defined transportation network, such as the network of pipelines in oil and gas markets. In this paper, we analyze the relationship between price integration, i.e. the distribution of prices across geographically distinct locations in the market, and the features of the underlying transportation network.…

Abstract: Using airlines as a backdrop, we study optimal overbooking policies with endogenous customer demand, when customers internalize their expected cost of being bumped. We first consider the traditional setting in which compensation for bumped passengers is fixed and booking limits are the airline's only form of control. We provide sufficient conditions under which demand endogeneity leads to lower overbooking limits in this case. We then consider the broader problem of joint control of ticket price, bumping compensation, and booking…

Abstract: Despite the great empirical success of deep reinforcement learning, its theoretical foundation is less well understood. In this work, we make the first attempt to theoretically understand the deep Q-network (DQN) algorithm from both algorithmic and statistical perspectives. Specifically, we focus on a slight simplification of DQN that fully captures its key features. Under mild assumptions, we establish the algorithmic and statistical rates of convergence for the action-value functions of the iterative policy sequence obtained by DQN. In particular,…

Learn more about the Berkeley IEOR MS & PhD Programs Interested in learning more about the University of California, Berkeley IEOR PhD and MS programs? At this information session, Professor Alper Atamturk will give a brief overview of the program, its curriculum, and the diverse career possibilities within the field. .tribe-events-cal-links {display: none !important;}

Title: To Brush or Not to Brush: Product Rankings, Consumer Search and Fake Orders Abstract: “Brushing” — the practice of online merchants placing fake orders of their own products on e-commerce platforms — has recently received widespread public attention. On the one hand, brushing enables merchants to boost their rankings in search results, because products with higher sales volume are often ranked higher. On the other hand, rankings matter because search frictions faced by consumers narrow their attention to only…