Metalearners for Ranking Treatment Effects

TL;DR

This paper introduces a ranking-based approach for treatment effect allocation that directly optimizes profit under budget constraints, addressing limitations of traditional causal effect estimation methods.

Contribution

It proposes a novel learning-to-rank methodology for treatment allocation that aligns predictions with operational profit maximization, scalable to large datasets.

Findings

The ranking approach maximizes the area under the profit curve.

Empirical validation shows improved allocation performance.

The method scales efficiently to large datasets.

Abstract

Efficiently allocating treatments with a budget constraint constitutes an important challenge across various domains. In marketing, for example, the use of promotions to target potential customers and boost conversions is limited by the available budget. While much research focuses on estimating causal effects, there is relatively limited work on learning to allocate treatments while considering the operational context. Existing methods for uplift modeling or causal inference primarily estimate treatment effects, without considering how this relates to a profit maximizing allocation policy that respects budget constraints. The potential downside of using these methods is that the resulting predictive model is not aligned with the operational context. Therefore, prediction errors are propagated to the optimization of the budget allocation problem, subsequently leading to a suboptimal allocation policy. We propose an alternative approach based on learning to rank. Our proposed methodology directly learns an allocation policy by prioritizing instances in terms of their incremental profit. We propose an efficient sampling procedure for the optimization of the ranking model to scale our methodology to large-scale data sets. Theoretically, we show how learning to rank can maximize the area under a policy's incremental profit curve. Empirically, we validate our methodology and show its effectiveness in practice through a series of experiments on both synthetic and real-world data.