Assessing fairness of selfish revenue sharing mechanisms for airline alliances

Assessing fairness of selfish revenue sharing mechanisms for airline alliances

0.00 Avg rating0 Votes
Article ID: iaor20128273
Volume: 41
Issue: 4
Start Page Number: 641
End Page Number: 652
Publication Date: Aug 2013
Journal: Omega
Authors: ,
Keywords: business process modelling, revenue sharing
Abstract:

Airline alliances offer flights including flight legs operated by different airlines. A major problem is how to share the revenue obtained through selling a flight ticket among the airlines in a fair way. Recently, Kimms and Çetiner [1] have proposed fair revenue allocations based on the solution concept nucleolus, which assumes that the decisions of the alliance are given centrally. However, in an alliance, each airline has a selfish behavior and tries to maximize its own revenue. The contribution of this paper is twofold. First, we provide a method to evaluate the fairness of revenue sharing mechanisms applied in a selfish setting. The method includes a simulation model for the booking process of the alliance and uses the nucleolus‐based allocations as benchmark. Second, we develop a revenue sharing mechanism based on the transfer of dual prices. The fairness of the new mechanism and several other existing approaches is assessed through a numerical study.

Reviews

Required fields are marked *. Your email address will not be published.