File Download
There are no files associated with this item.
Links for fulltext
(May Require Subscription)
- Publisher Website: 10.1287/mnsc.1120.1591
- Scopus: eid_2-s2.0-84878027802
- WOS: WOS:000318834500011
- Find via
Supplementary
- Citations:
- Appears in Collections:
Article: Revenue sharing in airline alliances
Title | Revenue sharing in airline alliances |
---|---|
Authors | |
Keywords | Capacity control Contract design Cooperative game theory Nash equilibrium Revenue management |
Issue Date | 2013 |
Publisher | INFORMS. The Journal's web site is located at http://mansci.pubs.informs.org |
Citation | Management Science, 2013, v. 59 n. 5, p. 1177-1195 How to Cite? |
Abstract | We propose a two-stage game-theoretic approach to study the operations of an airline alliance in which independent carriers, managing different reservation and information systems, can collaboratively market and operate codeshare and interline itineraries. In the first-stage game, airlines negotiate fixed proration rates to share the revenues generated by such itineraries. In the second-stage game, airlines operate independent inventory control systems to maximize their own expected revenues. We derive a revenue-sharing rule that is (i) an admissible outcome of the first-stage negotiation, in the sense that no airline coalition has enough incentives to secede from the grand alliance, and (ii) efficient for the second-stage game, in the sense that the decentralized system can achieve the same revenues as a central planner managing the global alliance network. Our numerical study shows that the proposed proration rates can lead to a significant increase in revenues with respect to other rules commonly used in practice. Finally, because our proposal requires the disclosure of private demand information, we introduce a simple alternative rule that is based on public information. This heuristic performs remarkably well, becoming an interesting candidate to be pursued in practice. © 2013 INFORMS. |
Description | Second Place of the AGIFORS Anna Valicek Paper Competition, 2011 |
Persistent Identifier | http://hdl.handle.net/10722/280192 |
ISSN | 2023 Impact Factor: 4.6 2023 SCImago Journal Rankings: 5.438 |
ISI Accession Number ID |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Hu, X | - |
dc.contributor.author | Caldentey, R | - |
dc.contributor.author | Vulcano, G | - |
dc.date.accessioned | 2020-01-06T06:50:19Z | - |
dc.date.available | 2020-01-06T06:50:19Z | - |
dc.date.issued | 2013 | - |
dc.identifier.citation | Management Science, 2013, v. 59 n. 5, p. 1177-1195 | - |
dc.identifier.issn | 0025-1909 | - |
dc.identifier.uri | http://hdl.handle.net/10722/280192 | - |
dc.description | Second Place of the AGIFORS Anna Valicek Paper Competition, 2011 | - |
dc.description.abstract | We propose a two-stage game-theoretic approach to study the operations of an airline alliance in which independent carriers, managing different reservation and information systems, can collaboratively market and operate codeshare and interline itineraries. In the first-stage game, airlines negotiate fixed proration rates to share the revenues generated by such itineraries. In the second-stage game, airlines operate independent inventory control systems to maximize their own expected revenues. We derive a revenue-sharing rule that is (i) an admissible outcome of the first-stage negotiation, in the sense that no airline coalition has enough incentives to secede from the grand alliance, and (ii) efficient for the second-stage game, in the sense that the decentralized system can achieve the same revenues as a central planner managing the global alliance network. Our numerical study shows that the proposed proration rates can lead to a significant increase in revenues with respect to other rules commonly used in practice. Finally, because our proposal requires the disclosure of private demand information, we introduce a simple alternative rule that is based on public information. This heuristic performs remarkably well, becoming an interesting candidate to be pursued in practice. © 2013 INFORMS. | - |
dc.language | eng | - |
dc.publisher | INFORMS. The Journal's web site is located at http://mansci.pubs.informs.org | - |
dc.relation.ispartof | Management Science | - |
dc.subject | Capacity control | - |
dc.subject | Contract design | - |
dc.subject | Cooperative game theory | - |
dc.subject | Nash equilibrium | - |
dc.subject | Revenue management | - |
dc.title | Revenue sharing in airline alliances | - |
dc.type | Article | - |
dc.identifier.email | Hu, X: xinghu@hku.hk | - |
dc.identifier.authority | Hu, X=rp02633 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1287/mnsc.1120.1591 | - |
dc.identifier.scopus | eid_2-s2.0-84878027802 | - |
dc.identifier.volume | 59 | - |
dc.identifier.issue | 5 | - |
dc.identifier.spage | 1177 | - |
dc.identifier.epage | 1195 | - |
dc.identifier.isi | WOS:000318834500011 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0025-1909 | - |