307 research outputs found
Static Pricing Problems under Mixed Multinomial Logit Demand
Price differentiation is a common strategy for many transport operators. In
this paper, 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. Numerical experiments show the effectiveness of our
method on a published, non-trivial, parking choice model
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