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Voluntary overbooking in commercial airline reservations

Voluntary overbooking in commercial airline reservations
Voluntary overbooking in commercial airline reservations
This paper studies a voluntary overbooking model under rational expectation equilibrium to promote cooperation between customers and airlines, maintain goodwill of customers, and maximize the expected total returns to airlines. A decision tree analysis is constructed for both customers and airlines. Sensitivity analysis is conducted in both realistic and simulated no-show random variables for validation. The findings suggest considerable mutual benefits associated with a ‘voluntary overbooking’ policy that emphasizes mutual cooperation between passengers and commercial airlines. The main underlying assumption of the paper is that customers are willing to provide valuations to airlines seeking volunteers for overbooking. The originality of the proposed model is the incorporation of elements of the Rational expectations hypothesis into classical overbooking models gleaned from the literature.
Logistics, Overbooking, Commercial Airlines, Transportation, Modelling
0969-6997
Doraid, Dalalah
077ef7d9-696d-4507-ad6a-9e0c1afae50c
Ojiako, Udi
f8775c83-9bd4-4592-8489-f01344e81a2d
Chipulu, Maxwell
12545803-0d1f-4a37-b2d2-f0d21165205e
Doraid, Dalalah
077ef7d9-696d-4507-ad6a-9e0c1afae50c
Ojiako, Udi
f8775c83-9bd4-4592-8489-f01344e81a2d
Chipulu, Maxwell
12545803-0d1f-4a37-b2d2-f0d21165205e

Doraid, Dalalah, Ojiako, Udi and Chipulu, Maxwell (2020) Voluntary overbooking in commercial airline reservations. Journal of Air Transport Management, [101835]. (doi:10.1016/j.jairtraman.2020.101835).

Record type: Article

Abstract

This paper studies a voluntary overbooking model under rational expectation equilibrium to promote cooperation between customers and airlines, maintain goodwill of customers, and maximize the expected total returns to airlines. A decision tree analysis is constructed for both customers and airlines. Sensitivity analysis is conducted in both realistic and simulated no-show random variables for validation. The findings suggest considerable mutual benefits associated with a ‘voluntary overbooking’ policy that emphasizes mutual cooperation between passengers and commercial airlines. The main underlying assumption of the paper is that customers are willing to provide valuations to airlines seeking volunteers for overbooking. The originality of the proposed model is the incorporation of elements of the Rational expectations hypothesis into classical overbooking models gleaned from the literature.

Text
Dorrid et al 2020 Voluntary overbooking-JATM third rev_5th of april 2020 - Accepted Manuscript
Restricted to Repository staff only until 15 November 2021.
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More information

Accepted/In Press date: 6 May 2020
e-pub ahead of print date: 15 May 2020
Published date: July 2020
Keywords: Logistics, Overbooking, Commercial Airlines, Transportation, Modelling

Identifiers

Local EPrints ID: 440948
URI: http://eprints.soton.ac.uk/id/eprint/440948
ISSN: 0969-6997
PURE UUID: 8c477df0-555d-4386-a4d7-6bab8e776bff
ORCID for Maxwell Chipulu: ORCID iD orcid.org/0000-0002-0139-6188

Catalogue record

Date deposited: 26 May 2020 16:30
Last modified: 29 Jul 2020 01:35

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