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Approximate Nucleolus-Based Revenue Shares for Airline Alliances

In: Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances

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  • Demet Çetiner

Abstract

In this chapter, we first motivate the choice of nucleolus-based revenue shares for strategic passenger airline alliances. Then, the algorithms for finding the nucleolus of cooperative games are reviewed. In this study, we make use of an algorithm that combines lexicographic minimization with a constraint generation procedure. To incorporate the stochastic nature of demand, in Sect. 6.4, we propose a randomized approach for computing the revenue shares. An extensive numerical study on randomly generated alliance networks is performed and presented in Sect. 6.5. Finally, Sect. 6.6 uses nucleolus-based revenue shares as a benchmark to improve proration rates obtained through a decentralized First Come First Served (FCFS) policy. This chapter is based on Kimms and Çetiner (2012).

Suggested Citation

  • Demet Çetiner, 2013. "Approximate Nucleolus-Based Revenue Shares for Airline Alliances," Lecture Notes in Economics and Mathematical Systems, in: Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances, edition 127, chapter 0, pages 83-109, Springer.
  • Handle: RePEc:spr:lnechp:978-3-642-35822-7_6
    DOI: 10.1007/978-3-642-35822-7_6
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    Cited by:

    1. Mario Guajardo & Kurt Jörnsten & Mikael Rönnqvist, 2016. "Constructive and blocking power in collaborative transportation," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(1), pages 25-50, January.

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