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:
“Philosophers of science constantly discuss theories and representation of reality, but say almost nothing about experiment, technology, or the use of knowledge to alter the world. This is odd, because ‘experimental method’ used to be just another name for scientific method.... I hope [to] initiate a Back-to-Bacon movement, in which we attend more seriously to experimental science. Experimentation has a life of its own.”
—Ian Hacking (b. 1936)
“His life itself passes deeper in nature than the studies of the naturalist penetrate; himself a subject for the naturalist. The latter raises the moss and bark gently with his knife in search of insects; the former lays open logs to their core with his axe, and moss and bark fly far and wide. He gets his living by barking trees. Such a man has some right to fish, and I love to see nature carried out in him.”
—Henry David Thoreau (1817–1862)
“It is the characteristic of great poems that they will yield of their sense in due proportion to the hasty and the deliberate reader. To the practical they will be common sense, and to the wise wisdom; as either the traveler may wet his lips, or an army may fill its water-casks at a full stream.”
—Henry David Thoreau (1817–1862)
“Why not draft executive and management brains to prepare and produce the equipment the $21-a-month draftee must use and forget this dollar-a-year tommyrot? Would we send an army into the field under a dollar-a-year General who had to be home Mondays, Wednesdays and Fridays?”
—Lyndon Baines Johnson (1908–1973)
“You can’t talk about a kind of democracy unless those who are affected by decisions make those decisions whether the institutions in question be the welfare department, the university, the factory, the farm, the neighborhood, the country.”
—Casey Hayden (b. c. 1940)