Optimal booking limits in the presence of strategic consumer behavior
International Transactions in Operational ResearchPublished 1 March 2006
John G. Wilson, Chris Anderson, Sang‐Won Kim
Citations22
SJR quartileQ1
SJR score0.99
SNIP1.51
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TL;DR
This work considers a two-period airline yield management problem where customers may act strategically and shows how to find optimal booking limits in the presence of such strategic customer behavior.
Abstract
Abstract We consider a two‐period airline yield management problem where customers may act strategically. Specifically, we allow for the possibility that a customer may decide to defer purchase in the hope that a ticket cheaper than those currently on offer will become available. We also allow for the possibility that some customers will buy a more expensive ticket if the cheaper tickets are not available. We show how to find optimal booking limits in the presence of such strategic customer behavior. We also explicitly incorporate the fact that, once a booking limit has been reached, demand distributions are now censored distributions.
Keywords
Business, Management and Accounting
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