  With a novel search algorithm or assortment planning or assortment
optimization algorithm that takes into account a Bayesian approach to
information updating and two-stage assortment optimization techniques, the
current research provides a novel concept of competitiveness in the digital
marketplace. Via the search algorithm, there is competition between the
platform, vendors, and private brands of the platform. The current paper
suggests a model and discusses how competition and collusion arise in the
digital marketplace through assortment planning or assortment optimization
algorithm. Furthermore, it suggests a model of an assortment algorithm free
from collusion between the platform and the large vendors. The paper's major
conclusions are that collusive assortment may raise a product's purchase
likelihood but fail to maximize expected revenue. The proposed assortment
planning, on the other hand, maintains competitiveness while maximizing
expected revenue.
