Journal article

Assortment optimization under the Sequential Multinomial Logit Model

G Berbeglia, Alvaro Flores, Pascal Van Hentenryck

European Journal of Operational Research | Elsevier | Published : 2019

Abstract

We study the assortment optimization problem under the Sequential Multinomial Logit (SML), a discrete choice model that generalizes the Multinomial Logit (MNL). Under the SML model, products are partitioned into two levels, to capture differences in attractiveness, brand awareness and, or visibility of the products in the market. When a consumer is presented with an assortment of products, she first considers products in the first level and, if none of them is purchased, products in the second level are considered. This model is a special case of the Perception-Adjusted Luce Model (PALM) recently proposed by Echenique et al. (2018). It can explain many behavioral phenomena such as the attrac..

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University of Melbourne Researchers