Performance of dynamic user influence strategies in PODS under seasonality and system volatility

Larry Weatherford ()
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Larry Weatherford: College of Business

Journal of Revenue and Pricing Management, 2019, vol. 18, issue 1, No 2, 2-26

Abstract: Abstract This paper summarizes results from Passenger Origin–Destination Simulator (PODS) research on how dynamic user influence performs under seasonality and system volatility. We explore the revenue results for two different dynamic user influence (UI) strategies—unbiased and biased high–under varying demand levels, with and without hybrid forecasting, under either strong-positive or weak-positive correlation of demand. In short, dynamic UI seeks to emulate revenue management (RM) analysts’ attempts to positively influence the RM system. In this study, we use a large “international” network with 572 O-D markets and four different airlines competing for passengers, including a low-cost carrier. The revenue results show that out of 224 individual experiments, we only found eight cases (less than 4%) where there was not a revenue improvement over the comparable base case without dynamic UI. This is a ringing endorsement of the use of dynamic UI, independent of demand level, or forecasting strategy.

Keywords: Dynamic user influence; Seasonality; Volatility; Correlation of demand; Passenger choice; Airline revenue management (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s41272-017-0135-8

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