Affordable Uplift: Supervised Randomization in Controlled Exprtiments

Johannes Haupt, Daniel Jacob, Robin M. Gubela and Stefan Lessmann

No 2019-026, IRTG 1792 Discussion Papers from Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series"

Abstract: Customer scoring models are the core of scalable direct marketing. Uplift models provide an estimate of the incremental benefit from a treatment that is used for operational decision-making. Training and monitoring of uplift models require experimental data. However, the collection of data under randomized treatment assignment is costly, since random targeting deviates from an established targeting policy. To increase the cost-efficiency of experimentation and facilitate frequent data collection and model training, we introduce supervised randomization. It is a novel approach that integrates existing scoring models into randomized trials to target relevant customers, while ensuring consistent estimates of treatment effects through correction for active sample selection. An empirical Monte Carlo study shows that data collection under supervised randomization is cost-efficient, while downstream uplift models perform competitively.

Keywords: Uplift Modeling; Causal Inference; Experimental Design; Selection Bias (search for similar items in EconPapers)
JEL-codes: C00 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:irtgdp:2019026

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