Cost-Restricted Feature Selection for Data Acquisition

When acquiring consumer data for marketing or new business initiatives, it is important to decide what attributes or features of potential customers should be acquired. We study a new feature selection problem in the context of customer data acquisition in which different features have different acq...

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Bibliographic Details
Published in:Management science 2023-07, Vol.69 (7), p.3976-3992
Main Authors: Liu, Xiaoping, Li, Xiao-Bai, Sarkar, Sumit
Format: Article
Language:English
Subjects:
Acquisition
Acquisitions & mergers
Budget constraint
Customers
data acquisition
Feature extraction
feature selection
Lasso
linear regression
logistic regression
Marketing
Optimization
Problem solving
Regression analysis
Selection criteria
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Summary:When acquiring consumer data for marketing or new business initiatives, it is important to decide what attributes or features of potential customers should be acquired. We study a new feature selection problem in the context of customer data acquisition in which different features have different acquisition costs. This feature selection problem is studied for linear regression and logistic regression. We formulate the feature selection and acquisition problems as nonlinear discrete optimization problems that minimize prediction errors subject to a budget constraint. We derive the analytical properties of the solutions for the problems, develop a computational procedure for solving the problems, provide an intuitive interpretation for the feature selection criteria, and discuss managerial implications of the solution approach. The results of the experimental study demonstrate the effectiveness of our approach. This paper was accepted by Kartik Hosanagar, information systems. Supplemental Material: Data are available at https://doi.org/10.1287/mnsc.2022.4551 .
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.2022.4551