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.
Editorial Reviews
Review
From the book reviews:
“The book has nine chapters. … the book is well-written, self-contained, and would be of interest to academics working in this area. … it brings together the theoretical (centralized) allocation approach with the heuristics for the decentralized case … .” (Arne K. Strauss, Interfaces, Vol. 44 (5), September–October, 2014)
From the Back Cover
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.
About the Author
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.
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