Paper #1140

Title:

The customer valuations game as a basis for revenue management

Author:

Kalyan Talluri

Date:

December 2008

Abstract:

I describe the customer valuations game, a simple intuitive game that can serve as a foundation for teaching revenue management. The game requires little or no preparation, props or software, takes around two hours (and hence can be finished in one session), and illustrates the formation of classical (airline and hotel) revenue management mechanisms such as advanced purchase discounts, booking limits and fixed multiple prices. I normally use the game as a base to introduce RM and to develop RM forecasting and optimization concepts off it. The game is particularly suited for non-technical audiences.

Keywords:

Revenue management, teaching, valuations

JEL codes:

C61, L93, L83, M11

Area of Research:

Management and Organization Studies

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