Experimental Studies of Yield Management Decisions
Recently, people working in the area of Behavioral operations research have begun to study the yield management decisions of actual human decision makers. One question that this research addresses is how much might revenues increase if managers relied on yield management systems rather than their own judgment when making pricing decisions. Using methods from experimental economics, this work has revealed that yield management systems are likely to increase revenues significantly. Further, this research reveals that "errors" in yield management decisions tend to be quite systematic. For instance, Bearden, Murphy, and Rapoport showed that with respect to expected revenue maximizing policies, people tend to price too high when they have high levels of inventory and too low when their inventory levels are low.
Read more about this topic: Yield Management
Famous quotes containing the words experimental, studies, yield, management and/or decisions:
“When we run over libraries persuaded of these principles, what havoc must we make? If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames; for it can contain nothing but sophistry and illusion.”
—David Hume (1711–1776)
“Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in our colleges. The consequence is, that while he is reading Adam Smith, Ricardo, and Say, he runs his father in debt irretrievably.”
—Henry David Thoreau (1817–1862)
“You oughtn’t to yield to temptation.
Well, somebody must, or the thing becomes absurd.”
—Anthony Hope (1863–1933)
“The management of fertility is one of the most important functions of adulthood.”
—Germaine Greer (b. 1939)
“What causes adolescents to rebel is not the assertion of authority but the arbitrary use of power, with little explanation of the rules and no involvement in decision-making. . . . Involving the adolescent in decisions doesn’t mean that you are giving up your authority. It means acknowledging that the teenager is growing up and has the right to participate in decisions that affect his or her life.”
—Laurence Steinberg (20th century)