International Journal of Japan Association for Management Systems
Online ISSN : 2188-2460
Print ISSN : 1884-2089
ISSN-L : 1884-2089
Local Relaxation of Constraints on Dissimilarity Parameters in the Generalized Nested Logit Model
Kei TAKAHASHI
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2019 Volume 11 Issue 1 Pages 73-80

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Abstract

This paper derives the exact necessary and sufficient constraints on the dissimilarity coefficients in the Generalized Nested Logit (GNL) model. Previous studies have assumed the Nested Logit (NL) model’s dis similarity coefficients lie within the unit interval, consistent with random utility maximization. However,those previous studies relaxed constraints on dissimilarity coefficients only for the NL model. We derived constraints on the dissimilarity coefficients for the GNL model. We tested the consistency by deriving the constraints of the NL model from those of the GNL model. Then, we proposed the parameter estimation method under derived constraints. We performed the parameter estimation using POS data from supermarkets. As a result, we obtained higher likelihoods and catching rates compared with the previous conditions.

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© 2019 Japan Association for Management Systems
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