Computing approximate Nash equilibria in general network revenue management games

W. Grauberger and A. Kimms

European Journal of Operational Research, 2014, vol. 237, issue 3, 1008-1020

Abstract: Computing optimal capacity allocations in network revenue management is computationally hard. The problem of computing exact Nash equilibria in non-zero-sum games is computationally hard, too. We present a fast heuristic that, in case it cannot converge to an exact Nash equilibrium, computes an approximation to it in general network revenue management problems under competition. We also investigate the question whether it is worth taking competition into account when making (network) capacity allocation decisions. Computational results show that the payoffs in the approximate equilibria are very close to those in exact ones. Taking competition into account never leads to a lower revenue than ignoring competition, no matter what the competitor does. Since we apply linear continuous models, computation time is very short.

Keywords: Network revenue management; Competition; Approximate Nash equilibria; Algorithmic game theory (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221714001805
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:237:y:2014:i:3:p:1008-1020

DOI: 10.1016/j.ejor.2014.02.045

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
Bibliographic data for series maintained by Catherine Liu ().