Mathematical model for revenue management under oligopolistic competition
by Nur Aini Masruroh; Yun Prihantina Mulyani
International Journal of Revenue Management (IJRM), Vol. 9, No. 1, 2016

Abstract: Revenue management (RM) models have been developed for products characterised as perishable with fixed capacity. This paper proposes mathematical models for RM under oligopolistic competition, using price as the sole factor that affects demand. These models are developed based on two different conditions. First, the competition among players is explicitly under deterministic and stochastic conditions with three possible scenarios namely deterministic oligopoly, sequential oligopoly and extended duopoly are evaluated. Second, the oligopoly competition is explained using customer valuation to capture demand changes towards price fluctuation. The models are then integrated with quantity-based RM to form the revenue model. Optimal pricing strategy is evaluated using game theory approach. All models are developed based on empirical case for hotel RM. The result shows that the model, which is developed using N-player game theory with 'cartel against single player' formation, is the most representative model with consistent ability to predict the actual system.

Online publication date: Tue, 26-Apr-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Revenue Management (IJRM):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email