Modeling of competition in revenue management
نویسنده
چکیده
Revenue management (RM) is the art and science of predicting consumer behavior and optimizing price and product availability to maximize revenue. RM models, despite their success and popularity, still remain somewhat simplistic. The most critical flaw is that current RM models are designed under the assumption that demands are independent random variables. The models are readily extended to competitive settings. The paper is devoted to modeling of competition in revenue management. The revenue management problems under competition can be formulated as games. Results from game theory allow to study the existence and uniqueness of equilibrium policies in revenue management games. An approximation algorithm can be used for solving the revenue management problems under competition.
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