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- Title
Interdependences of Products in Market Baskets: Comparing the Conditional Restricted Boltzmann Machine to the Multivariate Logit Model.
- Authors
Hruschka, Harald
- Abstract
We analyze market baskets of individual households in two consumer durables categories (music, computer related products) by the multivariate logit (MVL) model, its finite mixture extension (FM-MVL) and the conditional restricted Boltzmann machine (CRBM). The CRBM attains a vastly better out-of-sample performance than MVL and FM-MVL models. Based on simulation-based likelihood ratio tests we prefer the CRBM to the FM-MVL model. To interpret hidden variables of conditional Boltzmann machines we look at their average probability differences between purchase and non-purchases of any sub-category across all baskets. To measure interdependences we compute cross effects between sub-categories for the best performing FM-MVL model and CRBM. In both product categories the CRBM indicates more or higher positive cross effects than the FM-MVL model. Finally, we suggest appropriate future research based on larger and more detailed data sets.
- Subjects
MARKET basket analysis; DURABLE consumer goods; MACHINE learning; BOLTZMANN machine; PROBABILITY theory
- Publication
Review of Marketing Science, 2021, Vol 19, Issue 1, p33
- ISSN
2194-5985
- Publication type
Article
- DOI
10.1515/roms-2020-0074