403 research outputs found
Transformer Choice Net: A Transformer Neural Network for Choice Prediction
Discrete-choice models, such as Multinomial Logit, Probit, or Mixed-Logit,
are widely used in Marketing, Economics, and Operations Research: given a set
of alternatives, the customer is modeled as choosing one of the alternatives to
maximize a (latent) utility function. However, extending such models to
situations where the customer chooses more than one item (such as in e-commerce
shopping) has proven problematic. While one can construct reasonable models of
the customer's behavior, estimating such models becomes very challenging
because of the combinatorial explosion in the number of possible subsets of
items. In this paper we develop a transformer neural network architecture, the
Transformer Choice Net, that is suitable for predicting multiple choices.
Transformer networks turn out to be especially suitable for this task as they
take into account not only the features of the customer and the items but also
the context, which in this case could be the assortment as well as the
customer's past choices. On a range of benchmark datasets, our architecture
shows uniformly superior out-of-sample prediction performance compared to the
leading models in the literature, without requiring any custom modeling or
tuning for each instance
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