Opaque Selling Mechanism for Airlines with Strategic Passengers of Demand Uncertainty

doi:10.3969/j.issn.1007-7375.e16-1081

Abstract

Abstract: The effect of passenger strategic behavior on the revenue of airlines when demand is uncertain is studied. The opaque selling mechanism is introduced to the ticket sale process. A Hotelling model is proposed and the optimal price obtained, with market coverage and expected revenue of airlines with two mechanisms discussed. Finally, numerical experiments are presented to analyze the difference of two mechanisms. And it is found that opaque selling can ease the passenger strategic behavior and enhance the airlines' profit.

Key words: opaque selling, strategic behavior, Hotelling model, demand uncertainty

CLC Number:

F272.3

TAN Meirong, LI Hao. Opaque Selling Mechanism for Airlines with Strategic Passengers of Demand Uncertainty[J]. Industrial Engineering Journal , 2017, 20(2): 19-25.

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