Approximate Nucleolus-Based Revenue Shares for Airline Alliances

Demet Çetiner

Chapter Chapter 6 in Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances, 2013, pp 83-109 from Springer

Abstract: Abstract In this chapter, we first motivate the choice of nucleolus-based revenue shares for strategic passenger airline alliances. Then, the algorithms for finding the nucleolus of cooperative games are reviewed. In this study, we make use of an algorithm that combines lexicographic minimization with a constraint generation procedure. To incorporate the stochastic nature of demand, in Sect. 6.4, we propose a randomized approach for computing the revenue shares. An extensive numerical study on randomly generated alliance networks is performed and presented in Sect. 6.5. Finally, Sect. 6.6 uses nucleolus-based revenue shares as a benchmark to improve proration rates obtained through a decentralized First Come First Served (FCFS) policy. This chapter is based on Kimms and Çetiner (2012).

Keywords: Revenue Share; Airline Alliances; Constraint Generation Procedure; Lexicographic Minimization; First Come First Served (FCFS) (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/978-3-642-35822-7_6

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