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Séminaire sur les jeux dynamiques et les applications

Pricing, Assortment, and Inventory Decisions under Nested Logit Demand and Equal Profit Margins


12 oct. 2023   11h00 — 12h00

Bacel Maddah American University of Beirut, Liban

Bacel Maddah

Présentation sur YouTube.

We consider the interdependent decisions on assortment, inventory and pricing of substitutable products under a nested logit consumer choice, and a single-period, newsvendor-type, supply setting. This applies to fashion goods. We assume that all products have equal profit margins. Under a Taylor series-type approximation, we derive several concavity properties of the expected profit function, and gain insights into the structure of the optimal solution. Our results allow developing an efficient, single-variable search, heuristic for jointly deciding on assortment, pricing, and inventory decisions. We argue that our approach continues to hold under more general consumer choice.

Georges Zaccour responsable


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