Kalyan TALLURI

Revenue Management, Customer Behavior and Competition

Revenue management models, despite their success and popularity, still remain somewhat simplistic. To list the most important flaws:

1. They do not incorporate customer purchase behavior and preferences (or do it in an ad-hoc fashion)
and are mostly based on an independent products assumption
2. Do not take competition into account
3. Base their demand forecasts on historic data using time-series models.

In this talk we propose models that start to rectify some
of these short comings--starting from a discrete choice model of customer behavior, we propose models for RM product design, pricing and competition.