Bierlaire, M.

Solving a pricing problem under irrational behavior

Speaker: Bierlaire Michel

Seminar of the Canada Excellence Research Chair in Data Science for Real-Time Decision-Making, Polytechnique Montréal

July 18, 2023

Mathematical modeling of choice behavior is rooted in microeconomic theory, and relies on the assumption that economic actors behave rationally. However, there is empirical evidence that the rationality assumption does not always hold. In this talk, we will present some of this evidence and describe how to develop behavioral models that can account for this apparent irrationality. We will then consider a formulation of a price problem where the customers’ choice is represented by that behavioral model.