Incentive mechanism to control customer buy-down behaviour

V Sri Vanamalla and R Parthasarathy ()
Additional contact information
V Sri Vanamalla: Indian Institute of Science
R Parthasarathy: Indian Institute of Science

Journal of the Operational Research Society, 2011, vol. 62, issue 8, 1566-1573

Abstract: Abstract Airlines have successfully practiced revenue management over the past four decades and enhanced their revenue. Most of the traditional models that are applied assume that customers buying a high-fare class ticket will not purchase a low-fare class ticket even if it is available. This is not a very realistic assumption and has led to revenue leakage due to customers exhibiting buy-down behaviour. This paper aims at devising a suitable incentive mechanism that would incite the customer to reveal his nature. This helps in reducing revenue leakage. We show that the proposed incentive mechanism is profitable to both the buyer and seller and hence ensures the buyers participation in the mechanism.

Keywords: buy-down control; revenue management; mechanism (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/jors.2010.57 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:jorsoc:v:62:y:2011:i:8:d:10.1057_jors.2010.57

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/41274

DOI: 10.1057/jors.2010.57

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald and Jonathan Crook

More articles in Journal of the Operational Research Society from Palgrave Macmillan, The OR Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().