USE OF GAME THEORY TO MAXIMIZE PROFITS

1. Describe the change in Southwest Airlines boarding process.
2. What was Southwest’s main goal introducing the early-bird check-in?
3. Explain how Southwest Airlines used the game theory approach to increase its profits.
• What is the outcome of the game involving early-bird check-in?
• Identify what is the passengers’ dominant strategy.
• Determine why travelers face the Prisoner’s Dilemma with the early-bird check-in process.
4. Analyze the advantages and disadvantages of the early-bird check-in process for Southwest Airlines.
5. Suggest ways in which other companies, or the company you work for, can utilize similar game approach to maximize profits.