Regression Analysis Is Increasingly Being Used in Business Applications, Often

question 107

Essay

Regression analysis is increasingly being used in business applications, often called "business analytics" (or "predictive analytics"), in which a company studies its customers to gather information that can be used to make each customer more profitable.Companies that do this include Harrah's and eHarmony, among many others.
Required:
(1) Briefly explain how a company could use regression to improve customer profitability.
(2) Do you see any ethical issues involved in the use of business analytics? Explain.

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Definitions:

Internal Attribution

Refers to the inference that a person's behavior is due to personal factors like traits, beliefs, or abilities.

External Attribution

The process of attributing one's behavior to external factors or situations outside the individual’s control.

Social Psychology

The study of how people think about, influence, and relate to other people.

Social Cognition

The area of social psychology exploring how people select, interpret, remember, and use social information.