Title: Application of optimal control theory in marketing: What is the optimal number of choices on a shopping website?

Authors: Reza Kheirandish, Anjala S. Krishen, Pushkin Kachroo

Addresses: School of Business, Clayton State University, Morrow, GA 30260, USA. ' Department of Marketing, University of Nevada Las Vegas, Las Vegas, NV 89154, USA. ' Department of Electrical and Computer Engineering, University of Nevada, Las Vegas, 4505 S. Maryland Pkwy, Las Vegas, NV 89154-4026, USA

Abstract: There have been some recent interests in making websites responsive to the dynamic behaviour of users. We present a method for applying the steps of optimal control theory to internet shopping platforms. The information rate is a state variable to maximise and the rate of change in number of options available to the consumer is our control variable to minimise. We apply optimal control theory to identify the optimal number of options. We specify and solve the necessary and sufficient conditions for the optimal control for a class of objective functions, which gives a nonlinear two-point boundary value problem.

Keywords: optimal control; feedback control; marketing science; two-point boundary value problem; dynamic e-commerce; electronic commerce; shopping websites; online shopping; consumer behaviour; internet shopping; optimal choice.

DOI: 10.1504/IJCAT.2009.023944

International Journal of Computer Applications in Technology, 2009 Vol.34 No.3, pp.207 - 215

Published online: 21 Mar 2009 *

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