Title: Econometric Inference of Rental Company's Preference

Sean Han, IMA

We propose a new approach to model off-rental car prices in the auction market. Due to the illiquidity of the market, prices are considered as decision variables from an optimal stopping problem, in which the business preference of the rental company is embedded. A group-based nonlinear-regression technique is developed to estimate the full model. Some difficulties from the perspective of mathematical modeling for rental business will be discussed. (This is a joint work with Suzhou Huang and Jingren Shi at Ford .)