AI-Mediation in Retail Markets: Revenue Effects and Assortment Optimization
arXiv:2610.12917v1 Announce Type: new Abstract: AI shopping assistants increasingly influence which products consumers consider. We study retail assortment planning under AI mediation, where a retailer chooses a catalog, an AI intermediary forms a customer-facing shortlist, and the customer chooses from that shortlist according to a multinomial logit model. We consider both deterministic mediation, in which the AI follows a fixed segment-specific ranking, and stochastic mediation based on the P…