c:o/re Junior Fellow 09/23 – 08/24
Guillaume Yon is a historian of economics, who researches and teaches how the ideas that shaped our economic thinking emerged. He is particularly interested in the economic knowledge produced by engineers working in industry. His current project is a history of airlines’ pricing. From the 1980s to today, operations researchers working for airlines developed computerized systems in order to make pricing more market-responsive, dynamic and detailed than it had ever been before. While doing so, they articulated new forms of economic/technological thinking and new visions of the marketplace. Before coming to Aachen, Guillaume worked at the Max Planck Institute for the History of Science in Berlin, the London School of Economics, and the Center for the History of Political Economy at Duke University.
The Rise of Marketplace Engineering: Dynamic Pricing in the Airline Industry since the 1980s.
Fast-changing prices are part and parcel of the online shopping experience nowadays, from Amazon to Uber, from hotels to concert tickets sellers. It all started in the airline industry, in the 1980s United States. After deregulation, the largest airlines developed algorithms to automate pricing, fed by large datasets on passengers’ booking behavior, and taking advantage of the existing computerized distribution systems – what was at the time the first global electronic commerce infrastructure. This project studies the work of the engineers who built these systems in airlines – known to specialists as revenue management systems – and then improved them, from the 1980s to today. They use a form of thinking which is a combination of statistics and probability, mathematical programming, computer science and econometrics, in order to deploy at industrial scale sophisticated new business strategies for price discrimination and product differentiation. The goal of the project is to describe how they articulated new economic/technological problems, formed new concepts and developed a holistic vision of a global electronic – and then online – marketplace. Based on interviews with the engineers who built revenue management systems for airlines, from the origins in the 1980s to the last iterations today, and a review of the technical literature they produced, the project explores how these marketplace engineers work and think.
Publications (selection)
Yon, Guillaume. 2023. A History of Revenue Management and Pricing. In INFORMS. https://www.informs.org/Explore/History-of-O.R.-Excellence/O.R.-Methodologies/Revenue-Management
Yon, Guillaume. 2024. Marketplace Engineers at Work: How Dynamic Airline Ticket Pricing Came into Being. https://khk.rwth-aachen.de/2024/01/31/9192/marketplace-engineers-at-work-how-dynamic-airline-ticket-pricing-came-into-being/.
