Bounds on revenue for the random consideration set choice model

Abstract

The random consideration set choice model is a recently proposed choice model that can capture the stochastic choice behavior of consumers. One advantage of the random consideration set choice model is that it can accommodate some phenomena that cannot be explained by the multinomial logit model. In this paper, we prove revenue bounds when the attention probabilities and preference order over products change for the random consideration set model. The bounds proposed can be used to control revenue differences when consumers' preference over product changes and can be useful for settings like online assortment optimization with a non-stationary environment.