Revenue management, customer behavior and competition

Kalyan Talluri
Universitat Pompeu Fabra
INSEAD (visiting current academic year)

Abstract:  Revenue management (RM) has been a success story for OR.  However, recent
business developments point to some fundamental problems with traditional RM  modeling and
implementations.  Specifically, ignoring customer behavior and competition is severely limiting the
application and further development of RM techniques.  We survey current research efforts to overcome
these problems and incorporate customer choice behavior, pricing and competition effects into RM.