 Improved bid prices for choice-based network revenue managementJoern Meissner and Arne Strauss European Journal of Operational Research, 2012, vol. 217, issue 2, 417-427 Abstract: One of the latest developments in network revenue management (RM) is the incorporation of customer purchase behavior via discrete choice models. Many authors presented control policies for the booking process that are expressed in terms of which combination of products to offer at a given point in time and given resource inventories. However, in many implemented RM systems—most notably in the hotel industry—bid price control is being used, and this entails the problem that the recommended combination of products as identified by these policies might not be representable through bid price control. If demand were independent from available product alternatives, an optimal choice of bid prices is to use the marginal value of capacity for each resource in the network. But under dependent demand, this is not necessarily the case. In fact, it seems that these bid prices are typically not restrictive enough and result in buy-down effects. Keywords: Revenue management; Network; Bid prices; Choice (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:217:y:2012:i:2:p:417-427 DOI: 10.1016/j.ejor.2011.09.028 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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