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  • 2022
  • Working Paper
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Product2Vec: Leveraging Representation Learning to Model Consumer Product Choice in Large Assortments

By: Fanglin Chen, Xiao Liu, Davide Proserpio and Isamar Troncoso
  • Format:Print
  • | Language:English
  • | Pages:83
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Abstract

We propose a method, Product2Vec, based on representation learning, that can automatically learn latent product attributes that drive consumer choices, to study product-level competition when the number of products is large. We demonstrate Product2Vec’s interpretability and capability for scalable causal inference. For interpretability, first, we theoretically demonstrate that there exists a direct link between product vectors and product attributes by deriving a formal proof. Second, we use product embedding to create two metrics, complementarity and exchangeability, that allow us to distinguish between products that are complements and substitutes, respectively. For causal inference, we combine product vectors with choice models and show that we can achieve better accuracy—both in terms of model fit and unbiased price coefficients—when compared to a model based solely on observable attributes, and obtain results similar to those obtained with a more complex model that includes a fixed effect for every product.

Keywords

Consumer Choice; Consumer Behavior; Competition; Product Marketing

Citation

Chen, Fanglin, Xiao Liu, Davide Proserpio, and Isamar Troncoso. "Product2Vec: Leveraging Representation Learning to Model Consumer Product Choice in Large Assortments." NYU Stern School of Business Research Paper Series, July 2022.
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About The Author

Isamar Troncoso

Marketing
→More Publications

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More from the Authors
  • Does Gender Matter? The Effect of Management Responses on Reviewing Behavior By: Davide Proserpio, Isamar Troncoso and Francesca Valsesia
  • Soul and Machine (Learning) By: Davide Proserpio, John R. Hauser, Xiao Liu, Tomomichi Amano, Burnap Alex, Tong Guo, Dokyun (DK) Lee, Randall Lewis, Kanishka Misra, Eric Schwarz, Artem Timoshenko, Lilei Xu and Hema Yoganarasimhan
  • Look the Part? The Role of Profile Pictures in Online Labor Markets By: Isamar Troncoso and Lan Luo
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