CATS-Jan-31-2014
Title
Selling Tomorrow's Bargains Today
Speaker
Melika Abolhassani, University of Maryland
Abstract
Consider a family who decides, on Monday, that they would like to go on vacation the following weekend. Reserving a hotel involves an interesting dilemma: should they book a room now, or wait until late in the week? Booking now assures them a place to stay that is affordable. On the other hand, many hotels offer last minute deals, which could save the potential vacationers money if they decide to wait. Taking full advantage of last minute offers generally requires too much risk and too much effort on the part of an individual buyer, but such offers quickly become appealing if these costs can be split across many customers. Thus a company can make a profit in this way. In this work we consider what the reasonable deals for a company is and in what ways it can make a profit.