Business analytics meets artificial intelligence: Assessing the demand effects of discounts on Swiss train tickets

We assess the demand effects of discounts on train tickets issued by the Swiss Federal Railways, the so-called `supersaver tickets', based on machine learning, a subfield of artificial intelligence. Considering a survey-based sample of buyers of supersaver tickets, we investigate which customer- or trip-related characteristics (including the discount rate) predict buying behavior, namely: booking a trip otherwise not realized by train, buying a first- rather than second-class ticket, or rescheduling a trip (e.g.\ away from rush hours) when being offered a supersaver ticket. Predictive machine learning suggests that customer's age, demand-related information for a specific connection (like departure time and utilization), and the discount level permit forecasting buying behavior to a certain extent. Furthermore, we use causal machine learning to assess the impact of the discount rate on rescheduling a trip, which seems relevant in the light of capacity constraints at rush hours. Assuming that (i) the discount rate is quasi-random conditional on our rich set of characteristics and (ii) the buying decision increases weakly monotonically in the discount rate, we identify the discount rate's effect among `always buyers', who would have traveled even without a discount, based on our survey that asks about customer behavior in the absence of discounts. We find that on average, increasing the discount rate by one percentage point increases the share of rescheduled trips by 0.16 percentage points among always buyers. Investigating effect heterogeneity across observables suggests that the effects are higher for leisure travelers and during peak hours when controlling several other characteristics.

Large Population Sizes and Crossover Help in Dynamic Environments

Dynamic linear functions on the hypercube are functions which assign to each bit a positive weight, but the weights change over time. Throughout optimization, these functions maintain the same global optimum, and never have defecting local optima. Nevertheless, it was recently shown [Lengler, Schaller, FOCI 2019] that the $(1+1)$-Evolutionary Algorithm needs exponential time to find or approximate the optimum for some algorithm configurations. In this paper, we study the effect of larger population sizes for Dynamic BinVal, the extremal form of dynamic linear functions. We find that moderately increased population sizes extend the range of efficient algorithm configurations, and that crossover boosts this positive effect substantially. Remarkably, similar to the static setting of monotone functions in [Lengler, Zou, FOGA 2019], the hardest region of optimization for $(\mu+1)$-EA is not close the optimum, but far away from it. In contrast, for the $(\mu+1)$-GA, the region around the optimum is the hardest region in all studied cases.