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ABSTRACT A Microeconomic Data Mining Problem: Customer-Oriented Catalog Segmentation

By Martin Ester, Rong Ge, Wen Jin and Zengjian Hu

Abstract

The microeconomic framework for data mining [7] assumes that an enterprise chooses a decision maximizing the overall utility over all customers where the contribution of a customer is a function of the data available on that customer. In Catalog Segmentation, the enterprise wants to design k product catalogs of size r that maximize the overall number of catalog products purchased. However, there are many applications where a customer, once attracted to an enterprise, would purchase more products beyond the ones contained in the catalog. Therefore, in this paper, we investigate an alternative problem formulation, that we call Customer-Oriented Catalog Segmentation, where the overall utility is measured by the number of customers that have at least a specified minimum interest t in the catalogs. We formally introduce the Customer-Oriented Catalog Segmentation problem and discuss its complexity. Then we investigate two different paradigms to design efficient, approximate algorithms for the Customer-Oriented Catalog Segmentation problem, greedy (deterministic) and randomized algorithms. Since greedy algorithms may be trapped in a local optimum and randomized algorithms crucially depend on a reasonable initial solution, we explore a combination of these two paradigms. Our experimental evaluation on synthetic and real data demonstrates that the new algorithms yield catalogs of significantly higher utility compared to classical Catalog Segmentation algorithms

Topics: General Terms, Algorithms Keywords, microeconomic data mining, catalog segmentation
Year: 2008
OAI identifier: oai:CiteSeerX.psu:10.1.1.121.8203
Provided by: CiteSeerX
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