
241Demand Modeling
which is a relatively simple expression for the probability that the kth cus-
tomer will prefer option i over the other alternatives. Notice that the sum
P
j
ki
equals 1. This is to be expected because all customers are required to
choose one (exhaustive) and only one (mutually exclusive) option. Before we
solve an example problem to show how logit is used in practice, we discuss
the results obtained so far.
8.3.1.2 Properties of the Logit Model
There are some properties of the logit model directly evident from the choice
probability expression. The choice probabilities lie between 0 and 1, as one
would expect for a probabilit