Please use this identifier to cite or link to this item:
http://hdl.handle.net/2445/120164
Title: | Price and Profit Optimization for Financial Services |
Author: | Bolancé Losilla, Catalina Guillén, Montserrat Nielsen, Jens Perch Thuring, Fredrik |
Keywords: | Optimització matemàtica Política de preus Mercat financer Risc (Assegurances) Mathematical optimization Prices policy Financial market Risk (Insurance) |
Issue Date: | 2018 |
Publisher: | MDPI |
Abstract: | Prospective customers of financial and insurance products can be targeted based on the profit the provider expects to earn from them. We present a model for individual expected profit and two alternatives for calculating optimal personalized prices that maximize the expected profit. For one of these alternatives, we obtain a closed-form expression for the price offered to each prospective customer; for the other, we need to use a numerical approximation. In both approaches, the profits generated by prospective customers are not immediately observed, given that the products sold by these companies have a risk component. We assume that willingness to pay is heterogeneous and apply our methodology using real data from a European insurance company. Our study indicates that a substantial boost in profits can be expected when applying the simplest optimal pricing method proposed. |
Note: | Reproducció del document publicat a: https://doi.org/10.3390/risks6010009 |
It is part of: | Risks , 2018, vol. 6, num. 1, p. 9-29 |
URI: | http://hdl.handle.net/2445/120164 |
Related resource: | https://doi.org/10.3390/risks6010009 |
ISSN: | 2227-9091 |
Appears in Collections: | Articles publicats en revistes (Econometria, Estadística i Economia Aplicada) |
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