3. (1) Using UCB for demand learning, select arm with index} = argrnaxj- :lJ + %, what role } \\- I does i\" play here and Why? I J (2) Suppose each period you need to choose a price among {3, 4, 5} to maximize revenue, and now you are at the beginning of period 7. You have all the historical data from periods 1-6. Let p(t) and d(t) be the price and demand you observed during period t. You have, p(1)=3, d(l )=10; p(2)=4, d(2)=8; p(3)=5, d(3)=7; p(4)=4, d(4)=5; p(5)=4, d(5)=7; p(6)=4, d(6)=8. Let K=l. What price to pick for period T and why? Upper Confidence Bounds (UCB) . Discretize the price interval REFERENCE FOR THE . . . . . . QUESTION amin a; amax K . At the begging of every period t, compute + for every price a;, where ni nj . T; is the cumulative revenue when charging aj . n; is the number of periods that a; was charged in the past . K is a constant K . Select ] = argmax; , and set the price for period t to be a;. n n K is the driver for exploration! nj