Research Paper#Personalized Promotions, Dynamic Pricing, Reference Effects, AI in Retail🔬 ResearchAnalyzed: Jan 3, 2026 18:41
Personalized Promotions: Dynamic Allocation and Reference Effects
Analysis
This paper presents a practical application of AI in personalized promotions, demonstrating a significant revenue increase through dynamic allocation of discounts. It also introduces a novel combinatorial model for pricing with reference effects, offering theoretical insights into optimal promotion strategies. The successful deployment and observed revenue gains highlight the paper's practical impact and the potential of the proposed model.
Key Takeaways
- •Demonstrates a successful application of AI in personalized promotions for a large online retailer.
- •Achieved a 4.5% revenue increase through dynamic promotion allocation.
- •Introduces a novel combinatorial model for pricing with reference effects.
- •Provides theoretical insights into optimal promotion strategies based on customer reference values.
Reference
“The policy was successfully deployed to see a 4.5% revenue increase during an A/B test.”