%0 Generic
%A Marandi, Ahmadreza
%A Lurkin, Virginie
%D 2020
%T LiBiT algorithm to solve static pricing problems under mixed multinomial logit demand
%U https://data.4tu.nl/articles/dataset/LiBiT_algorithm_to_solve_static_pricing_problems_under_mixed_multinomial_logit_demand/12852824/1
%R 10.4121/12852824.v1
%K static multi-product pricing
%K mixed logit model
%K nonlinear optimization model
%K Branching Methods
%K convex optimization
%K Convex Relaxation
%X Price differentiation is a common strategy for many operators. We study a static multiproduct price optimization problem with demand given by a continuous mixed multinomial logit model. To solve this new problem, we design an efficient iterative optimization algorithm that asymptotically converges to the optimal solution. To this end, a linear optimization (LO) problem is formulated, based on the trust-region approach, to find a "good" feasible solution and approximate the problem from below. Another LO problem is designed using piecewise linear relaxations to approximate the optimization problem from above. Then, we develop a new branching method to tighten the optimality gap.
%I 4TU.ResearchData