When can the two-armed bandit algorithm be trusted?

Can CLI be trusted?

Calling Line Identification (CLI) tells the recipient of a telephone call the number at the other end of the line. However, various insecurities mean that even on traditional telephone systems, CLI cannot be entirely relied upon to be accurate. Once Voice-overIP (VoIP) enters the picture, CLI validity effectively depends upon the integrity of Internet traceability, and must therefore be treated...

A Two-Armed Bandit Theory of Market

Economics lacks a good theory of how stores should set their prices when they do not know the demand functions of their customers. Traditional theory either assumes that firms know their demand curves, or that they can, if necessary, find them out easily and costlessly from market experience. The market will inform the perfectly competitive firm of its demand function with ruthless efficiency. ...

A two armed bandit type problem

MULTI–ARMED BANDIT FOR PRICING Multi–Armed Bandit for Pricing

This paper is about the study of Multi–Armed Bandit (MAB) approaches for pricing applications, where a seller needs to identify the selling price for a particular kind of item that maximizes her/his profit without knowing the buyer demand. We propose modifications to the popular Upper Confidence Bound (UCB) bandit algorithm exploiting two peculiarities of pricing applications: 1) as the selling...

Max K-Armed Bandit: On the ExtremeHunter Algorithm and Beyond

This paper is devoted to the study of the max K-armed bandit problem, which consists in sequentially allocating resources in order to detect extreme values. Our contribution is twofold. We first significantly refine the analysis of the ExtremeHunter algorithm carried out in Carpentier and Valko (2014), and next propose an alternative approach, showing that, remarkably, Extreme Bandits can be re...