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# Hotel Price Prediction

As discussed earlier, a central part of our strategy depends on the ability to predict prices, particularly hotel prices, at various points in the game. To do this as accurately as possible, we used machine-learning techniques that would examine the hotel prices actually paid in previous games to predict prices in future games. This section discusses this part of our strategy in detail, including a new boosting-based algorithm for conditional density estimation.

There is bound to be considerable uncertainty regarding hotel prices since these depend on many unknown factors, such as the time at which the hotel room will close, who the other agents are, what kind of clients have been assigned to each agent, etc. Thus, exactly predicting the price of a hotel room is hopeless. Instead, we regard the closing price as a random variable that we need to estimate, conditional on our current state of knowledge (i.e., number of minutes remaining in the game, ask price of each hotel, flight prices, etc.). We might then attempt to predict this variable's conditional expected value. However, our strategy requires that we not only predict expected value, but that we also be able to estimate the entire conditional distribution so that we can sample hotel prices.

To set this up as a learning problem, we gathered a set of training examples from previously played games. We defined a set of features for describing each example that together are meant to comprise a snap-shot of all the relevant information available at the time each prediction is made. All of the features we used are real valued; a couple of the features can have a special value indicating ``value unknown.'' We used the following basic features:

• The number of minutes remaining in the game.
• The price of each hotel room, i.e., the current ask price for rooms that have not closed or the actual selling price for rooms that have closed.
• The closing time of each hotel room. Note that this feature is defined even for rooms that have not yet closed, as explained below.
• The prices of each of the flights.
To this basic list, we added a number of redundant variations, which we thought might help the learning algorithm:
• The closing price of hotel rooms that have closed (or if the room has not yet closed).
• The current ask price of hotel rooms that have not closed (or if the room has already closed).
• The closing time of each hotel room minus the closing time of the room whose price we are trying to predict.
• The number of minutes from the current time until each hotel room closes.

During the seeding rounds, it was impossible to know during play who our opponents were, although this information was available at the end of each game, and therefore during training. During the semifinals and finals, we did know the identities of all our competitors. Therefore, in preparation for the semifinals and finals, we added the following features:

• The number of players playing (ordinarily eight, but sometimes fewer, for instance if one or more players crashed).
• A bit for each player indicating whether or not that player participated in this game.

We trained specialized predictors for predicting the price of each type of hotel room. In other words, one predictor was specialized for predicting only the price of TT on day 1, another for predicting SS on day 2, etc. This would seem to require eight separate predictors. However, the tournament game is naturally symmetric about its middle in the sense that we can create an equivalent game by exchanging the hotel rooms on days 1 and 2 with those on days 4 and 3 (respectively), and by exchanging the inbound flights on days 1, 2, 3 and 4 with the outbound flights on days 5, 4, 3 and 2 (respectively). Thus, with appropriate transformations, the outer days (1 and 4) can be treated equivalently, and likewise for the inner days (2 and 3), reducing the number of specialized predictors by half.

We also created specialized predictors for predicting in the first minute after flight prices had been quoted but prior to receiving any hotel price information. Thus, a total of eight specialized predictors were built (for each combination of TT versus SS, inner versus outer day, and first minute versus not first minute).

We trained our predictors to predict not the actual closing price of each room per se, but rather how much the price would increase, i.e., the difference between the closing price and the current price. We thought that this might be an easier quantity to predict, and, because our predictor never outputs a negative number when trained on nonnegative data, this approach also ensures that we never predict a closing price below the current bid.

From each of the previously played games, we were able to extract many examples. Specifically, for each minute of the game and for each room that had not yet closed, we extracted the values of all of the features described above at that moment in the game, plus the actual closing price of the room (which we are trying to predict).

Note that during training, there is no problem extracting the closing times of all of the rooms. During the actual play of a game, we do not know the closing times of rooms that have not yet closed. However, we do know the exact probability distribution for closing times of all of the rooms that have not yet closed. Therefore, to sample a vector of hotel prices, we can first sample according to this distribution over closing times, and then use our predictor to sample hotel prices using these sampled closing times.

Subsections

Next: The Learning Algorithm Up: Decision-Theoretic Bidding Based on Previous: TAC
Peter Stone 2003-09-24