Choice Models and Permutation Invariance: Demand Estimation in Differentiated Products Markets

arXiv:2307.07090v2 Announce Type: replace-cross
Abstract: Choice modeling is at the core of understanding how changes to the competitive landscape affect consumer choices and reshape market equilibria. In this paper, we propose a fundamental characterization of choice functions that encompasses a wide variety of extant choice models. We demonstrate how non-parametric estimators like neural nets can easily approximate such functionals and overcome the curse of dimensionality that is inherent in the non-parametric estimation of choice functions. We demonstrate through extensive simulations …

abstract arxiv consumer core cs.lg demand econ.em equilibria functions landscape markets modeling paper products reshape type understanding