Decision And Analysis Based On Game Theory In Oligopoly Competitive Environment For Airline

The economic changes results in a change of air transportation industry in the world, which becomes much narrow. For airlines, it is urgent for them to make right decisions to face the complex market. The game theory is one of the effective tools to analyze this problem.This paper emphasizes on decisions for airline revenue according to the characteristic of domestic air transportation market. And it mainly contains the following content. First, it applies the model of autoregressive integrated moving average in time series analysis to forecast air transportation turnover volume of china. It is the base of analyzing the characteristic of domestic air transportation market in the future. Secondly, it uses some index to investigate the domestic market concentration degree and applies the method of cluster analysis to investigate the situation of domestic air transportation in competition. It can obtain the conclusion that one of the characteristic of domestic air transportation is oligopoly competition. Finally, the game theory is applied to investigate the pricing and seat inventory control problem in competitive market. It develops and analyzes the non-cooperative game models and the cooperative model to address the problem, obtaining the conditions under which the pure-strategy Nash equilibrium exists in these revenue management games. Even, it discusses a mechanism design for the cooperation of the two airlines in decision of pricing. It provides some reference for the administrative departments and the managers of airlines to make optimal decisions.