A numerical investigation of the impact of uncertain demand and varying risk preferences on the pricing and capacity decisions of transportation firms: The case of airlines
Warren Powell and
Clifford Winston ()
Transportation Research Part B: Methodological, 1983, vol. 17, issue 6, 471-490
In this paper, we attempt to motivate the importance of uncertain demand and varying risk preferences in understanding the behavior of transportation firms. Using specific functional forms, a numerical investigation of this issue is carried out for the case of airlines. The major finding is that changes in risk preferences do not significantly affect the choice of fare but do affect the choice of capacity. This finding is shown to be fairly robust as sensitivity tests are performed for some of the key parameters in the model. Finally, the relevance of the analysis in terms of characterizing the airlines' initial response to deregulation is briefly discussed.
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:17:y:1983:i:6:p:471-490
Ordering information: This journal article can be ordered from
https://shop.elsevie ... _01_ooc_1&version=01
Access Statistics for this article
Transportation Research Part B: Methodological is currently edited by Fred Mannering
More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().