Customer Interaction Patterns in Electronic Commerce: Maximizing Information Liquidity for Adaptive Decision Making

23 Pages Posted: 23 Oct 2008

See all articles by Vasant Dhar

Vasant Dhar

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: November 1999

Abstract

Electronic commerce is resulting in unprecedented amounts of transaction and behavior data that are available toorganizations. The emerging bottleneck is that of converting this data into useful information, or that of maximizingthe information liquidity - the rate at which organizations are able to transform the inherent information in a dataset into an economically valuable action. We describe how to overcome this bottleneck, by presenting a model formaximizing information liquidity in electronic commerce. Our model is usable in a variety of situations.Specifically, when a large amount of transaction data already exists, the model is able to exploit this data to generaterules describing preferences that can be used to classify behaviors, and to subsequently map behaviors of non-customersinto known ones. Alternatively, where the predominant data available are about behaviors, the model canbe used to cluster these behaviors and combine the resulting clusters with available transaction data to generate rulesdescribing preferences. In both cases, the central question addressed is "when do I have enough information to makea meaningful offer?� Acting too early can result in inappropriate offers, while acting too late can result in missedopportunities. Good information and timing are therefore critical; the model in this paper is a first step in thisdirection.

Suggested Citation

Dhar, Vasant, Customer Interaction Patterns in Electronic Commerce: Maximizing Information Liquidity for Adaptive Decision Making (November 1999). NYU Working Paper No. IS-99-17, Available at SSRN: https://ssrn.com/abstract=1288449

Vasant Dhar (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

HOME PAGE: http://www.stern.nyu.edu/~vdhar

New York University (NYU) - Department of Information, Operations, and Management Sciences

44 West Fourth Street
New York, NY 10012
United States

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