Discussion 2 Week 7 New Assignment Example | Topics and Well Written Essays - 250 words

Discussion 2 Week 7 New - Assignment Example Even with cooperating firms, game theory helps in safeguarding their prospects from being taken advantage of regarding own prices viz-a-viz â€Å"added value." This is a strategy used by airlines to charge higher prices for seats to travel during peak seasons, during holidays and/or during certain yearly/crucial events to certain parts of the world, for instance, the Muslims’ travel to Mecca for the Hajj pilgrimage. This pricing strategy often lowers the demand for the airlines tickets by limiting the number of those that can afford such expensive fares (Doganis, 2005). However, the strategy generally increases profits to such firms. In this strategy, customers are charged differently based on their willingness to pay viz-a-viz the extent of service offered. Travelling in First class seats cost usually costs more, double or multiple times the cost of other seats due to the added comfort like superior services and/or added special snacks/features (Belobaba, Odoni, & Barnhart, 2009). It is more a profit maximizing strategy than a demand related