Advance-Purchase Discounts and Monopoly Allocation of Capacity

摘要: Optimal pricing by a monopoly airline that faces capacity constraints during the peak demand period is studied. The existence of means in order to expand output must divert from off-peak period. A particular advance-purchase discount policy shown be profit-maximizing method selling tickets. If requirement were infeasible, and total surplus would both lower. (JEL L12) Substantial discounts for air travel are generally available travelers who willing purchase tickets week or more advance departure date. This paper demonstrates why imposition an may strategy facing times demand.1 practice imposing on also placed favorable light terms its impact social