Faculty Author: Dennis Yao
Students participate in a mock airfare war and learn how to set prices in a competitive environment while subtly sending signals to other companies
Fare Game is a simulation of the air fare competition that emerged from Midway Airline's aggressive entry into the Milwaukee market in 1989. In Fare Game, students participate in a mock "fare war" to demonstrate how airlines compete and/or cooperate using fare cuts and hikes.
As active participants in price-setting and resource allocation, students learn how to keep their company profitable, to keep investors content, and to "signal" other competitors in the marketplace.
The Fare Game tool supersedes a manual in-class exercise and offers fast results, real-time calculations, and increased student involvement.