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Joint Estimation of Discrete Choice Model and Arrival Rate with Unobserved Stock-out Events

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  • Hongzhang Shao
  • Anton J. Kleywegt

Abstract

This paper studies the joint estimation problem of a discrete choice model and the arrival rate of potential customers when unobserved stock-out events occur. In this paper, we generalize [Anupindi et al., 1998] and [Conlon and Mortimer, 2013] in the sense that (1) we work with generic choice models, (2) we allow arbitrary numbers of products and stock-out events, and (3) we consider the existence of the null alternative, and estimates the overall arrival rate of potential customers. In addition, we point out that the modeling in [Conlon and Mortimer, 2013] is problematic, and present the correct formulation.

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  • Hongzhang Shao & Anton J. Kleywegt, 2020. "Joint Estimation of Discrete Choice Model and Arrival Rate with Unobserved Stock-out Events," Papers 2003.02313, arXiv.org.
    • Handle: RePEc:arx:papers:2003.02313
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    References listed on IDEAS

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    1. Gustavo Vulcano & Garrett van Ryzin & Richard Ratliff, 2012. "Estimating Primary Demand for Substitutable Products from Sales Transaction Data," Operations Research, INFORMS, vol. 60(2), pages 313-334, April.
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    3. repec:cup:cbooks:9780521747387 is not listed on IDEAS
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    5. Christopher T. Conlon & Julie Holland Mortimer, 2013. "Demand Estimation under Incomplete Product Availability," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 1-30, November.
    6. Alain Bensoussan & Pengfei Guo, 2015. "Technical Note—Managing Nonperishable Inventories with Learning About Demand Arrival Rate Through Stockout Times," Operations Research, INFORMS, vol. 63(3), pages 602-609, June.
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    8. repec:cup:cbooks:9780521766555 is not listed on IDEAS
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