In–Out Algorithm for assortment planning under a ranking-based consumer choice model

Inadequate is the empirical research on store choice model in view of retail store attributes with endogenous construct of store patronage intention of consumer. Conventional wisdom and social science research-based insights for underpinning the design of store environment established elements such as music, scent, crowding and physical attractiveness of the store. Earlier empirical findings lack on key anterior, which include consumers’ time and effort as well as the psychological costs such as convenient, economical, risk mitigated shopping experience. The premise on which overall effects in our model rests, is that store attributes influence consumers' cognitive process and develop perceptual framework of store choice criteria — namely, convenience, reputation of outlet, branded merchandise (mediated through perceived quality). This research presents a formal test of the linear regression equation model in the context of store choice behaviour, involving one product category. The present paper explores these attributes and their affect on consumer from different socio-economic classes, willingness to purchase and to patronize if these factors are modified. Questioning the earlier conclusions that all attributes aforementioned are equally important in consumer decision making, the current results indicate that consumers place differential significance on each attribute, and the level of significance placed on each attribute varies with different socio economic class. These findings are significantly important to the retail industry as they identify the critical attributes responsible for building consumer choice and patronage among different socio economy classes. This model also paves way for another premise of empirical research, that shoppers might develop category-wise store choice or patronage behaviour model.

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Optimal Policy for Dynamic Assortment Planning Under Multinomial Logit Models

Mathematics of Operations Research ◽

10.1287/moor.2021.1133 ◽

2021 ◽

Author(s):

Xi Chen ◽

Yining Wang ◽

Yuan Zhou

Keyword(s):

Choice Model ◽

Current Knowledge ◽

Search Algorithm ◽

Multinomial Logit ◽

Planning Problem ◽

Assortment Planning ◽

Substitutable Products ◽

Dynamic Decisions ◽

Mnl Model ◽

Regret Bound

We study the dynamic assortment planning problem, where for each arriving customer, the seller offers an assortment of substitutable products and the customer makes the purchase among offered products according to an uncapacitated multinomial logit (MNL) model. Because all the utility parameters of the MNL model are unknown, the seller needs to simultaneously learn customers’ choice behavior and make dynamic decisions on assortments based on the current knowledge. The goal of the seller is to maximize the expected revenue, or, equivalently, to minimize the expected regret. Although dynamic assortment planning problem has received an increasing attention in revenue management, most existing policies require the estimation of mean utility for each product and the final regret usually involves the number of products [Formula: see text]. The optimal regret of the dynamic assortment planning problem under the most basic and popular choice model—the MNL model—is still open. By carefully analyzing a revenue potential function, we develop a trisection-based policy combined with adaptive confidence bound construction, which achieves an item-independent regret bound of [Formula: see text], where [Formula: see text] is the length of selling horizon. We further establish the matching lower bound result to show the optimality of our policy. There are two major advantages of the proposed policy. First, the regret of all our policies has no dependence on [Formula: see text]. Second, our policies are almost assumption-free: there is no assumption on mean utility nor any “separability” condition on the expected revenues for different assortments. We also extend our trisection search algorithm to capacitated MNL models and obtain the optimal regret [Formula: see text] (up to logrithmic factors) without any assumption on the mean utility parameters of items.

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Loss Aversion and Consumption Choice: Theory and Experimental Evidence

American Economic Journal Microeconomics ◽

10.1257/mic.20130104 ◽

2015 ◽

Vol 7 (2) ◽

pp. 101-120 ◽

Cited By ~ 20

Author(s):

Heiko Karle ◽

Georg Kirchsteiger ◽

Martin Peitz

Keyword(s):

Experimental Evidence ◽

Loss Aversion ◽

Consumer Choice ◽

Rational Expectations ◽

Choice Theory ◽

Choice Model ◽

Reference Points ◽

Price Uncertainty ◽

Theoretical Predictions

We analyze a consumer-choice model with price uncertainty, loss aversion, and expectation-based reference points. The implications of this model are tested in an experiment in which participants have to make a consumption choice between two sandwiches. Participants differ in their reported taste for the two sandwiches and in their degree of loss aversion, which we measure separately. We find that more-loss-averse participants are more likely to opt for the cheaper sandwich, in line with theoretical predictions. The estimates in the model with rational expectations are slightly more significant than those with naïve expectations. (JEL D11, D12, D84, M31)

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A Framework for Choice Modeling in Usage Context-Based Design

Volume 1: 36th Design Automation Conference, Parts A and B ◽

10.1115/detc2010-28490 ◽

2010 ◽

Cited By ~ 1

Author(s):

Lin He ◽

Christopher Hoyle ◽

Wei Chen ◽

Jiliang Wang ◽

Bernard Yannou

Keyword(s):

Data Collection ◽

Product Design ◽

Consumer Choice ◽

Choice Model ◽

Consumer Preferences ◽

Choice Modeling ◽

Product Performance ◽

Choice Data ◽

Modeling Framework ◽

Usage Context

Usage Context-Based Design (UCBD) is an area of growing interest within the design community. A framework and a step-by-step procedure for implementing consumer choice modeling in UCBD are presented in this work. To implement the proposed approach, methods for common usage identification, data collection, linking performance with usage context, and choice model estimation are developed. For data collection, a method of try-it-out choice experiments is presented. This method is necessary to account for the different choices respondents make conditional on the given usage context, which allows us to examine the influence of product design, customer profile, usage context attributes, and their interactions, on the choice process. Methods of data analysis are used to understand the collected choice data, as well as to understand clusters of similar customers and similar usage contexts. The choice modeling framework, which considers the influence of usage context on both the product performance, choice set and the consumer preferences, is presented as the key element of a quantitative usage context-based design process. In this framework, product performance is modeled as a function of both the product design and the usage context. Additionally, usage context enters into an individual customer’s utility function directly to capture its influence on product preferences. The entire process is illustrated with a case study of the design of a jigsaw.

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Rationality & Political Science: A Critical Analysis of the Consumer-Choice Model

Polity ◽

10.2307/3233997 ◽

1970 ◽

Vol 2 (4) ◽

pp. 479-493 ◽

Cited By ~ 5

Author(s):

Thomas Conrad

Keyword(s):

Political Science ◽

Consumer Choice ◽

Critical Analysis ◽

Choice Model

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Evaluating On-Road Emissions Impacts of HEVs, PHEVs and EVs: An Integrated Modeling Framework

Vehicle Dynamics ◽

10.18063/vd.v2i1.351 ◽

2018 ◽

Vol 2 (1) ◽

Author(s):

Kejia Hu ◽

Jianyou Zhao ◽

Yuche Chen ◽

L.D. White

Keyword(s):

Electric Vehicles ◽

Consumer Choice ◽

Choice Model ◽

Government Policies ◽

Harris County ◽

Road Transportation ◽

Modeling Framework ◽

Transportation Emissions ◽

Carbon Dioxide Co2

This paper develops a framework to evaluate HEVs, PHEVs and EVs on-road emissions impact, by integrating endogenous vehicle consumer choice model and MOVES-based regional emission transportation model. A case study based on Harris County, Texas data is implemented to examine the on-road emissions under different market penetrations (due to different future energy price) and government policies. The results show different on-road transportation emissions level for Carbon Dioxide (CO2), Carbon Monoxide (CO), Nitrogen Oxide (NOx) and Total Hydrocarbon (THC). In addition, cost effectiveness of reducing on-road emissions by extending tax credit for plug-in electric vehicles (PEV) is calculated and reported.

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On The Use Of Writing Assignments In Intermediate Microeconomic Theory

American Journal of Business Education (AJBE) ◽

10.19030/ajbe.v2i4.4057 ◽

2009 ◽

Vol 2 (4) ◽

pp. 25-36

Author(s):

Patrick B. O’Neill

Keyword(s):

Consumer Choice ◽

Choice Model ◽

Microeconomic Theory ◽

Writing Assignments ◽

Term Paper ◽

Writing Assignment ◽

Upper Level ◽

Economics Majors ◽

Required Courses

A typical writing assignment in upper level required courses is a term paper. However many economics majors, particularly those in business schools, need to develop skill at writing shorter pieces. In this paper I describe numerous examples of shorter writing assignments that I have incorporated into an Intermediate Microeconomic Theory course. The assignments include such activities as comparison of competing theories; non-traditional applications of theory; book reviews; and explorations of the nuances of the standard consumer choice model. In addition to describing the details of the various assignments, the paper presents both student and instructor assessment of them.

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