Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances

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.

Autorentext
Demet Çetiner worked as research assistant at the University of
Duisburg-Essen, Germany from 2008-2012. Since 2012 she has worked at the Supply Chain Consulting department of Bayer Technology Services.

Inhalt
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.