cs.LGJun 9, 2026

Data-Driven Dynamic Assortment in Online Platforms: Learning about Two Sides

Authors: Rahul RoyNur SunarJayashankar M. Swaminathan

Organizations: IE Business School, IE University, Madrid 28006 · Kenan-Flagler Business School, The University of North Carolina at Chapel Hill, NC 27599

Abstract

We study a dynamic assortment problem on a two-sided service platform with incomplete information and heterogeneous customers in a discrete-time setting. In each period, a customer arrives seeking service, and the platform chooses an assortment of sellers to display. The customer then proposes a transaction to at most one seller in the assortment according to a multinomial logit choice model. After a fixed number of periods, sellers review the proposals they have received and each chooses at most one customer according to another multinomial logit choice model, after which the cycle repeats. A key challenge is that the platform does not know the choice-model parameters of either customers or sellers in advance. To our knowledge, this is the first study of a dynamic assortment problem in which both sides' choice parameters are unknown. We develop a data-driven algorithm that learns these parameters while optimizing the platform's objective over time. We evaluate performance using regret, which measures revenue loss relative to a clairvoyant benchmark that knows all parameters and customer arrivals in advance. We show that the algorithm's worst-case regret grows polylogarithmically over time, and we derive a matching lower bound, establishing its rate optimality.

Explore similar work

CardsList
  1. Optimal Exploration of New Products under Assortment Decisions

    Apr 20, 2026Jackie Baek, Atanas Dinev, Thodoris LykourisLinear BanditsProducts

  2. Diffusion-Based Data-Driven Assortment Optimization

    Aug 11, 2026Junyi Liao, Xiaohui Jiang, Zhengwei Tong +2Data-DrivenReward Gradients