Analysis of a simple capacity game

Abstract We study a two‐player two‐fare‐class static single‐period capacity allocation game with complete information. Nonnested (partitioned) booking limit policies are investigated in both noncooperative and cooperative situations. We show the existence of unique Nash equilibrium in the noncooperative situation. In the cooperative game, we analyze the cost saving of the two players and investigate the concavity of the objective function. For …