Appendix — Methodological Notes
Why Elasticity Is Observational
Retail prices are not randomized. Observed price–quantity relationships reflect correlation, not causal response.
This system does not attempt causal identification. It focuses on robust decision-making given observed behavior.
Why Bootstrap Is Used
Closed-form uncertainty assumptions are fragile in pricing contexts.
Bootstrap resampling:
- captures parameter uncertainty
- avoids distributional assumptions
- supports downside-aware evaluation
Why No Machine Learning Models Are Used
The pricing decision is low-dimensional.
Additional model complexity:
- increases opacity
- complicates governance
- does not improve decision quality at this stage
ML pricing belongs to later integration phases.
Out-of-Scope Extensions
The following are intentionally excluded:
- causal pricing experiments
- promotion-response modeling
- multi-SKU or portfolio pricing
- inventory-constrained pricing
- dynamic or reinforcement learning pricing
These extensions require additional data and governance structures.
Closing Note
The system is designed to answer one question well:
What price can be deployed with confidence under uncertainty?
Everything else is deliberately deferred.