A major problem arising in airline alliances is to design allocation mechanisms determining how the revenue of a product should be shared among the airlines. The nucleolus is a concept of cooperative game theory that provides solutions for allocating the cost or benefit of a cooperation. This work provides fair revenue proportions for the airline alliances based on the nucleolus, which assumes a centralized decision making system. The proposed mechanism is used as a benchmark to evaluate the fairness of the revenue sharing mechanisms, where the alliance partners behave selfishly. Additionally, a new selfish revenue allocation rule is developed that improves the performance of the existing methods.
From the book reviews:
"The book has nine chapters. ... the book is well-written, self-contained, and would be of interest to academics working in this area. ... it brings together the theoretical (centralized) allocation approach with the heuristics for the decentralized case ... ." (Arne K. Strauss, Interfaces, Vol. 44 (5), September-October, 2014)
"The book has nine chapters. ... the book is well-written, self-contained, and would be of interest to academics working in this area. ... it brings together the theoretical (centralized) allocation approach with the heuristics for the decentralized case ... ." (Arne K. Strauss, Interfaces, Vol. 44 (5), September-October, 2014)