Two-Player Two-Fair-Class Hotel Revenue Management Game with Incomplete Information of Transferred Customers

Abstract

In this paper, we studied a two-player two-fare-class(high-fare and low-fare) static game with incomplete information of transfer rate for the hotel room inventory control. We examine the optimal booking policies of each player with different information structures: secret information, private information and public information. Our studies indicated that the value of secret information is always non-negative for both players and there exists a unique Bayesian Nash equilibrium in the game when one player receives the private information of the transfer rate. We also evaluated the values of private and public information for one player and we provided the conditions by which one player might use or drop the information of transferrate. Finally, our numerical experiments show that in the scenario when the booking requests expectations of one hotel are high and the booking requests expectations of the other are low, the value of any type of information is as high as 3% of his total expected revenue.