Dynamic Pricing with Seat Reservations: Study by Prof. Christiane Barz
On April 27, 2025, Operations Research published an article by Prof. Dr. Christiane Barz (Chair of Mathematics for Business and Economics). Barz et al. examine nested logit models for dynamic pricing with seat reservations and show how demand and preference data can be integrated to optimize both revenue and capacity utilization simultaneously.
Figure 1 illustrates how travelers can select buffer seats and influence additional fees. Based on this, the authors derive linked demand functions and integrate a second-price auction mechanism (Vickrey) to achieve fair pricing and efficient seat allocation.
Overall, the study provides a practical guide on extending logit models to incorporate flexible seat options, thereby increasing revenue on transportation and service platforms. For full mathematical details, please consult the original article.
Sources:
| Barz, C. et al. (2025) | Dynamic pricing with (extra) seat reservations under the nested logit model. Operations Research |
| Rights | Creative Commons Attribution 4.0 International (CC BY 4.0) |