Callable products for an implicit time model with dependent demands

G. Gallego, Haengju Lee
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Abstract

Capacity providers such as airlines and hotels have traditionally increased revenues by practicing market segmentation and revenue management, enabling them to sell the same capacity pool to different consumers at different prices. Callable products can enhance profits and improve consumers' welfare by allowing the firm to broker capacity between consumers with different willingness to pay. A consumer who buys a callable product gives the capacity provider the right to recall capacity at a prespecified recall price. This article studies callable products in the context of the model most commonly used in industry, which handles time implicitly imposing fewer restrictions on the nature of randomness compared to the Poisson arrival process favored in academia. In the implicit time model, capacity providers set booking limits to protect capacity for future high‐fare demand. Our numerical study identifies conditions where callable products result in significant gains in profits.
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具有依赖需求的隐式时间模型的可调用产品
航空公司和酒店等容量提供商传统上通过实行市场细分和收入管理来增加收入,使他们能够以不同的价格向不同的消费者出售相同的容量池。可调用产品允许企业在不同支付意愿的消费者之间进行能力中介,从而提高利润,改善消费者福利。购买可调用产品的消费者赋予容量提供者以预先指定的召回价格召回容量的权利。本文在工业中最常用的模型背景下研究可调用产品,与学术界青睐的泊松到达过程相比,该模型隐含地处理时间,对随机性的限制较少。在隐式时间模型中,运力供应商设定预订限制,以保护未来高票价需求的运力。我们的数值研究确定了可调用产品导致利润显著增加的条件。
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