Overbooking under dynamic and static policies

Wei Wang () and Darius Walczak
Additional contact information
Wei Wang: PROS Inc.
Darius Walczak: PROS Inc.

Journal of Revenue and Pricing Management, 2016, vol. 15, issue 6, No 10, 534-553

Abstract: Abstract Overbooking, no-shows and cancellations are important aspects of revenue management with published research going back several decades. Yet, despite availability of a variety of theoretical models including dynamic ones, in practice, airlines today are still applying relatively simplistic static solutions. We analyze underlying reasons for this situation and investigate potential benefits as complexity of the solution method increases. We present a comparison of modeling overbooking for no-shows and cancellations using dynamic and static policies, and also analyze impact of the refund as well as denied boarding cost structures.

Keywords: overbooking; no-shows; cancellations; dynamic programming; revenue management (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1057/rpm.2016.34

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