Product Assortment and Price Competition Under Multinomial Logit Demand

We analyze a general but parsimonious price competition model for an oligopoly in which each firm offers any number of products. The demand volumes are general piecewise affine functions of the full price vector, generated as the “regular” extension of a base set of affine functions. The model specifies a product assortment, along with their prices and demand volumes, in contrast to most commonly used demand models, such as the multinomial logit model or any of its variants. We show that a special equilibrium in this model has global robust stability. This means that, from any starting point, the market converges to this equilibrium when firms use a particular response mapping to dynamically adjust their own prices in response to their competitors’ prices. The mapping requires each firm to only know the demand function and cost structure for its own products (but not for other firms’ products).

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Price Competition Under Mixed Multinomial Logit Demand: Sufficiency Conditions for Validating the Model

Production and Operations Management ◽

10.1111/poms.13428 ◽

2021 ◽

Author(s):

Chung‐seung Lee ◽

Metin Çakanyildirim

Keyword(s):

Price Competition ◽

Multinomial Logit ◽

Sufficiency Conditions

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Price Competition Under Mixed Multinomial Logit Demand Functions

Management Science ◽

10.1287/mnsc.1120.1664 ◽

2013 ◽

Vol 59 (8) ◽

pp. 1817-1835 ◽

Cited By ~ 40

Author(s):

Margaret Aksoy-Pierson ◽

Gad Allon ◽

Awi Federgruen

Keyword(s):

Price Competition ◽

Multinomial Logit ◽

Demand Functions

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Price Discounts and Customized Product Assortment under Multinomial Logit Choice Model: A Robust Approach

SSRN Electronic Journal ◽

10.2139/ssrn.3530243 ◽

2020 ◽

Author(s):

Qingwei Jin ◽

Jen-Yen Lin ◽

Sean Zhou

Keyword(s):

Choice Model ◽

Multinomial Logit ◽

Robust Approach ◽

Product Assortment ◽

Price Discounts

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An investigation into the Online Sales Channels of Small Business Fashion Retailers on Portal Shopping and Fashion Shopping Malls

Family and Environment Research ◽

10.6115/fer.2021.032 ◽

2021 ◽

Vol 59 (4) ◽

pp. 449-463

Author(s):

Mi Young Son

Keyword(s):

Small Business ◽

Customer Loyalty ◽

Price Competition ◽

Easy Access ◽

Shopping Malls ◽

Price Competitiveness ◽

Product Assortment ◽

Sales Channels ◽

Online Sales ◽

Selection Factors

The aim of this study was to analyze the perceptions and entering status of small business online fashion retailers on portal shopping and fashion shopping malls. Case studies were conducted on a total of 10 research samples. The results were as follows: first, regarding the strategic factors of online fashion stores, ‘price competitiveness’ is important, especially in portal shopping and low-cost brands; ‘product assortment’ is important but not essential in all platforms; and ‘differentiation’ is important to continuously secure loyal customers in fashion shopping malls. Customer satisfaction leads to customer loyalty, and customer loyalty affects the sales conversion rate and brand growth of online sales channels. Factors that promoted sales activities in online sales channels were exposure, advertisements, SNS, events, special exhibitions, and events. Hindrance factors were low price competition, overheated competition, and the MD of sales channels. Second, the research samples used multiple online sales channels, including portal shopping malls and fashion shopping malls, in addition to their own malls. The selection factors were platform reputation and commission, branding, and customer inflow through exposure. Portal shopping malls were perceived as providing easy access, advertising/customer communication, exposure/search, price competitiveness, scalability, and intense competition, whereas fashion shopping malls were perceived as providing a brand image and concept, brand promotion, high commissions, difficult entry, and low profits. The factors for success in portal shopping malls were exposure/search, price competitiveness, and brand recognition, whereas the factors for success in fashion shopping malls were differentiation, brand, exposure/advertisement, product assortment, and MD.

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