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Unformatted text preview: and yet it follows the same basic principal (that is, to
maximize revenue and fill every seat before the
game/flight, as an empty seat has zero value the next
day). The systems airlines use are almost completely
automated, and seats on the same flight (as we discussed
in the Ethical Dilemma in this chapter) may have dozens
of different prices. Airlines change prices constantly,
whereas Anthony Perez and Chris Dorso play a more
“manual” role in modifying seat prices. They monitor
StubHub and Ticketmaster for market/demand updates.
Airlines, with millions of flight combinations, use
sophisticated algorithms on massive computers to set
and reset prices by the minute. The “popularity” of
specific airline routes tends to be constant on a seasonal
basis, whereas opponent teams’ ratings can change with
a winning streak or a “star” trade.
2. Original pricing system yields:
230 seats × $68/seat × 45 games = $703,800
for Terrace V, Zone 103 seats.
Dynamic pricing system:
230 seats [(3 games × $187/seat) + (3 × $170)
+ (4 × $85) + (6 × $75) + (14 × $60) + (9 × $44)
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- Spring '14