Effects of Discounted Fare and Seat Allocation: Modeling Passenger Behavior on Inter-City Rail

This paper describes how revenue management (RM) may include optimization of seat allocation if the existing seat allocation system is suboptimal. Transportation firms may decrease the average ticket price by introducing discounted tickets to increase the number of passengers. However, the total revenue may decrease if discounted tickets are introduced. The paper shows that a RM model may be chosen in order to benefit not only transportation companies but also passengers. The results show that discounted tickets perform best for off-peak trains after optimizing with respect to seat allocation. On ?intermediate? trains, which operate between peak and off-peak times, discounted tickets perform the best depending on the average passenger load factor.