Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances

Nonfiction, Science & Nature, Mathematics, Game Theory, Business & Finance, Management & Leadership, Operations Research
Cover of the book Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances by Demet Çetiner, Springer Berlin Heidelberg
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Author: Demet Çetiner ISBN: 9783642358227
Publisher: Springer Berlin Heidelberg Publication: April 3, 2013
Imprint: Springer Language: English
Author: Demet Çetiner
ISBN: 9783642358227
Publisher: Springer Berlin Heidelberg
Publication: April 3, 2013
Imprint: Springer
Language: English

​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.

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​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.

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