Product Line Pricing and Assortment Optimization Considering Consumer Search Cost

Addressing the practical challenge of a monopolistic enterprise selling multiple products on an online platform within a specific sales cycle, and taking into account the impact of consumers' search costs, this study employs the Multinomial Logit (MNL) model to simulate customers' decision-making processes. The analysis demonstrates that the profit function exhibits concavity concerning market share, leading to the derivation of theoretically optimal solutions for product pricing, market share allocation, and overall firm profitability. Subsequently, optimal decisions regarding product pricing, market share distribution, and enterprise profit are identified. Furthermore, by considering the constraints inherent in real-world sales scenarios, this research offers a strategic product selection sequence to maximize the enterprise's total revenue. The findings of this study offer valuable theoretical insights to guide enterprises in making informed decisions regarding product line design.