RT Monograph
SR 00
A1 Ely, Jeffrey
A1 Garrett, Daniel F.
A1 Hinnosaar, Toomas
T1 Overbooking
YR 2016
FD 2016-07
VO 16-678
SP 50
K1 Airlines
K1 overbooking
K1 revenue management
K1 dynamic mechanism design
AB We consider optimal pricing policies for airlines when passengers are uncertain at the time of ticketing of their eventual willingness to pay for air travel. Auctions at the time of departure efficiently allocate space and a profit maximizing airline can capitalize on these gains by overbooking ights and repurchasing excess tickets from those passengers whose realized value is low. Nevertheless profit maximization entails distortions away from the efficient allocation. Under regularity conditions, we show that the optimal mechanism can be implemented by a modified double auction. In order to encourage early booking, passengers who purchase late are disadvantaged. In order to capture the information rents of passengers with high expected values, ticket repurchases at the time of departure are at a subsidized price, sometimes leading to unused capacity.
T2 TSE Working Paper
PB TSE Working Paper
PP Toulouse
AV Published
LK https://publications.ut-capitole.fr/id/eprint/22244/
UL http://tse-fr.eu/pub/30570