Constrained Uplift Budget Allocation & Dynamic Pricing Optimization bridges individual CATE predictions to operational profit maximization under strict financial constraints; Mathematical formulation: for
N candidate users and treatment interventions
k, predicted incremental revenue lift is
ΔRik with promotional unit cost
Cik under total budget cap
B; formulated as a multi-choice Knapsack Linear Program:
max{xik}∑i,kxikΔRik subject to
∑i,kxikCik≤B and
∑kxik≤1; solved via dual Lagrange Multipliers establishing the optimal shadow price
λ∗ sorting users by Marginal Uplift ROI efficiency (
CikΔRik), proving mathematically optimal profit extraction under fixed capital.