Conference Proceedings

Assortment Optimisation under a General Discrete Choice Model: A Tight Analysis of Revenue-Ordered Assortments

Gerardo Berbeglia, Gwenael Joret

EC'17: PROCEEDINGS OF THE 2017 ACM CONFERENCE ON ECONOMICS AND COMPUTATION | ASSOC COMPUTING MACHINERY | Published : 2017

Abstract

e assortment problem in revenue management is the problem of deciding which subset of products to o.er to consumers in order to maximise revenue. A simple and natural strategy is to select the best assortment out of all those that are constructed by fixing a threshold revenue π and then choosing all products with revenue at least π. .is is known as the revenue-ordered assortments strategy. Our €rst contribution is an analysis of the performance of the revenue-ordered assortments strategy making only minimal assumptions about the underlying discrete choice model: We assume that consumers behave rationally, in the sense that the probability of choosing a speci€c product x 2 S when given a choi..

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University of Melbourne Researchers