Intrinsic Characterization And Scoring Of Classes

Abstract

The paper is about classification and scoring by neural networks. Especially in marketing applications, classification tasks are often high dimensional and only small data sets are available for the estimation of the model parameters. Further on, the classes are often unbalanced and can not be separated easily from each other. Since the class characteristics are often incomplete, the handling of missing data is also a critical issue. For these problems, we employ an autoassociator neural network, which incorporates prior knowledge about the classification task. We propose to transfer the classification into a scoring task. The reconstruction error of the autoassociator serves as a membership measure for e. g. the buyers or non-buyers in a marketing application. Within this framework, a socalled ‘square’ layer with a quadratic squashing function puts us in a better position to model localized structures in the data, so-called cleaning noise allows to construct a replacement for missing values in the data set. The usefulness of our neural network architectures is illustrated by a real-world scoring application in which we separate those persons from a database who show the greatest potential to buy a new product.