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Competition in the advanced sale of service capacity

Author

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  • Irene C.L. Ng
  • Khai Sheang Lee

Abstract

Since service production and consumption are inseparable, many service firms sell their capacity in advance. This paper examines the optimality and practice of advanced sale of service capacity under duopolistic competition. Using a game-theoretic approach, it attempts to explain why, despite sophisticated practices of advanced sale in many service industries, many service firms still do not sell in advance. It demonstrates that competition and market price sensitivity to a firm's capacity can impact not only a firm's decision to sell in advance, but also its pricing and capacity allocation decisions.

Suggested Citation

  • Irene C.L. Ng & Khai Sheang Lee, 2008. "Competition in the advanced sale of service capacity," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 2(4), pages 307-326.
    • Handle: RePEc:ids:ijrevm:v:2:y:2008:i:4:p:307-326
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    Cited by:

    1. Miquel Carreras-Simó, 2016. "Advanced sales and competition in a service industry," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 9(1), pages 1-16.

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