A behavioral study of capacity allocation in revenue management

Name: A behavioral study of capacity allocation in revenue management
Author: Katok, E., Cesaret, Bahriye

İsim	A behavioral study of capacity allocation in revenue management
Yazar	Katok, E., Cesaret, Bahriye
Basım Tarihi:	2025-03-04
Basım Yeri	- Taylor & Francis
Konu	Regret, Sequential decision-making, Capacity allocation, Revenue management, Behavioral operations
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	0160-5682
Kayıt Numarası	b9c506b9-6979-45b4-92f0-003014c9c83b
Lokasyon	Business Administration
Tarih	2025-03-04
Örnek Metin	We investigate how human decision-makers handle the two-class capacity allocation problem-a foundational revenue management problem and a cornerstone for more sophisticated scenarios. We consider the problem with ordered and unordered arrivals, and then introduce a simplified version with single up-front decision. We explore the decisions across two price ratios, symbolizing heterogeneous vs. more homogeneous customer bases. We find that decision-makers ineffectively allocate capacity, resulting in suboptimal revenues and underutilization of RM potential. Theoretically, the decision-making format for the capacity does not matter, whereas we find that decision-makers set higher protection levels when making an up-front decision rather than sequential decisions and earn higher revenues for heterogeneous customers. Decision-makers perform poorly in sequential decision-making, and heuristics can be useful in improving performance. Moreover, we observe several regularities in decision-making. With higher customer heterogeneity, decision-makers tend to accept customers who would have been declined by the optimal policy, indicating they are less demanding. Conversely, with more homogeneous customers, they tend to turn away customers who would have been accepted by the optimal policy, implying they are more demanding. Lastly, we investigate whether the decision-making is affected by feelings of regret and find strong effects for both winner's and loser's experienced regret.
DOI	10.1080/01605682.2024.2370872
Cilt	76

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A behavioral study of capacity allocation in revenue management

Yazar Katok, E., Cesaret, Bahriye

Basım Tarihi 2025-03-04

Basım Yeri - Taylor & Francis

Konu Regret, Sequential decision-making, Capacity allocation, Revenue management, Behavioral operations

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 0160-5682

Kayıt Numarası b9c506b9-6979-45b4-92f0-003014c9c83b

Lokasyon Business Administration

Tarih 2025-03-04

Örnek Metin We investigate how human decision-makers handle the two-class capacity allocation problem-a foundational revenue management problem and a cornerstone for more sophisticated scenarios. We consider the problem with ordered and unordered arrivals, and then introduce a simplified version with single up-front decision. We explore the decisions across two price ratios, symbolizing heterogeneous vs. more homogeneous customer bases. We find that decision-makers ineffectively allocate capacity, resulting in suboptimal revenues and underutilization of RM potential. Theoretically, the decision-making format for the capacity does not matter, whereas we find that decision-makers set higher protection levels when making an up-front decision rather than sequential decisions and earn higher revenues for heterogeneous customers. Decision-makers perform poorly in sequential decision-making, and heuristics can be useful in improving performance. Moreover, we observe several regularities in decision-making. With higher customer heterogeneity, decision-makers tend to accept customers who would have been declined by the optimal policy, indicating they are less demanding. Conversely, with more homogeneous customers, they tend to turn away customers who would have been accepted by the optimal policy, implying they are more demanding. Lastly, we investigate whether the decision-making is affected by feelings of regret and find strong effects for both winner's and loser's experienced regret.

DOI 10.1080/01605682.2024.2370872

Cilt 76