The impact of decision types on revenue management decisions: an experimental study

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buir.contributor.authorGöğüş, Celile Itır
dc.citation.epage249en_US
dc.citation.issueNumber2en_US
dc.citation.spage225en_US
dc.citation.volumeNumber49en_US
dc.contributor.authorKocabıyıkoğlu, A.en_US
dc.contributor.authorGöğüş, Celile Itıren_US
dc.contributor.authorHekimoğlu, M. H.en_US
dc.date.accessioned2019-02-21T16:06:09Z
dc.date.available2019-02-21T16:06:09Z
dc.date.issued2018en_US
dc.departmentDepartment of Managementen_US
dc.description.abstractIn the standard two-class revenue management model, the decision maker allocates a fixed resource between two customer classes with hierarchical prices and uncertain demand. The normative (i.e., expected revenue-maximizing) allocation is given by Littlewood's Rule, but little is known about how decision makers actually form these decisions. We report results of an experimental study that investigates revenue management decision-making. We find that subjects' behavior is influenced by the decision type. In particular, our subjects reserve more units for the high-end segment when they are asked to set the protection level (the number of units to set aside for the higher priced class) compared to when they set the booking limit (the number of units available for the lower priced class). We propose that this behavioral pattern can be explained by our subjects’ different valuations of revenues from the high- and low-end sales. We also observe that when there is a change in segment prices, although decision makers adjust allocations in the direction suggested by normative theory, the magnitude of adjustments is greater (and hence closer to the normative level) when the source of the price change matches the class whose allocation they determine.
dc.description.provenanceMade available in DSpace on 2019-02-21T16:06:09Z (GMT). No. of bitstreams: 1 Bilkent-research-paper.pdf: 222869 bytes, checksum: 842af2b9bd649e7f548593affdbafbb3 (MD5) Previous issue date: 2018en
dc.embargo.release2020-04-26en_US
dc.identifier.doi10.1111/deci.12270
dc.identifier.issn0011-7315
dc.identifier.urihttp://hdl.handle.net/11693/50294
dc.language.isoEnglish
dc.publisherBlackwell Publishing
dc.relation.isversionofhttps://doi.org/10.1111/deci.12270
dc.source.titleDecision Sciencesen_US
dc.subjectBehavioral operations managementen_US
dc.subjectRevenue managementen_US
dc.titleThe impact of decision types on revenue management decisions: an experimental studyen_US
dc.typeArticleen_US

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