In this paper, we study a conditional upgrade strategy that has recently emerged in the travel industry. After a consumer makes a reservation for a product (e.g., a hotel room), she is asked whether she would like to upgrade her product to a higher-quality (more expensive) one at a discounted...

We consider a setting where the firm sells a main service (e.g., air travel) and an ancillary service (e.g., in-flight meal) to two types of consumers (high-type and low-type, e.g., business travelers and leisure travelers). The firm decides whether to unbundle the ancillary service from the...

This paper studies the effect of introducing a vertical differentiation strategy through sales of upgrades to a new type of premium product on the firm's price dispersion arising from its use of price discrimination for the base product. As a relevant application, we examine, both analytically...

We are interested in whether preventing resale of tickets benefits the capacity providers for sporting and entertainment events. Common wisdom suggests that ticket resale is harmful to event organizers' revenues and event organizers have tried to prevent resale of tickets. For instance,...