Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances

• Main Author: Çetiner, Demet (Author)
• Corporate Author: SpringerLink (Online service)
• Format: Electronic eBook
• Language: English
• Published: Berlin, Heidelberg : Springer Berlin Heidelberg : Imprint: Springer, 2013.
• Series: Lecture Notes in Economics and Mathematical Systems, 668
• Subjects: Business.; Production management.; Operations research.; Decision making.; Management science.; Game theory.; Business and Management.; Operation Research/Decision Theory.; Operations Research, Management Science.; Game Theory.; Operations Management.

 A major problem arising in airline alliances is to design allocation mechanisms determining how the revenue of a product should be shared among the airlines. The nucleolus is a concept of cooperative game theory that provides solutions for allocating the cost or benefit of a cooperation. This work provides fair revenue proportions for the airline alliances based on the nucleolus, which assumes a centralized decision making system. The proposed mechanism is used as a benchmark to evaluate the fairness of the revenue sharing mechanisms, where the alliance partners behave selfishly. Additionally, a new selfish revenue allocation rule is developed that improves the performance of the existing methods. 

 Introduction -- Selected Topics in Revenue Management -- A Review of Strategic Passenger Airline Alliances -- Selected Topics in Cooperative Game Theory -- Airline Alliance Revenue Management Game -- Approximate Nucleolus-Based Revenue Shares for Airline Alliances -- Selfish Revenue Sharing Mechanisms for Airline Alliances -- A Revenue Sharing Mechanism Based on the Transfer of Dual Prices -- Conclusion and Future Research -- Appendix: Computational Study.