Economics at your fingertips  

The Effect of Demand Uncertainty on the Decisions and Revenues in the Two Class Revenue Management Model

Ayse Kocabiyikoğlu
Additional contact information
Ayse Kocabiyikoğlu: Bilkent Üniversitesi

Iktisat Isletme ve Finans, 2015, vol. 30, issue 347, 95-120

Abstract: We explore the impact of changes in market conditions on optimal allocation decisions and revenues, within the standard two-class revenue management framework, using stochastic dominance relations. We show that an increase in market size leads to higher revenues, and the number of units allocated to the high-end class increases in its market size. The direction of the change in optimal allocation and revenues in response to changes in the variability of the high-end market depends on the relationship between the high and lowend prices. Our structural and numerical results suggest higher variability in the market is generally detrimental to revenues.

Keywords: Revenue Management; Production Management (search for similar items in EconPapers)
JEL-codes: M11 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:

Ordering information: This journal article can be ordered from ... ew/iif.2015.347.3789

Access Statistics for this article

Iktisat Isletme ve Finans is currently edited by Ali Bilge

More articles in Iktisat Isletme ve Finans from Bilgesel Yayincilik
Series data maintained by Ali Bilge ().

Page updated 2017-09-29
Handle: RePEc:iif:iifjrn:v:30:y:2015:i:347:p:95-120