Mean Field Games in Dynamic Ticket Pricing with Overselling and Cancellations
Abstract
We extend a finite-state Mean Field Game model of dynamic ticket pricing to allow overselling, stochastic cancellations, and terminal penalties for unresolved negative inventory. Cancellations generate upward inventory transitions, producing a bidirectional inventory process coupled with firms' pricing decisions. We formulate the representative-firm control problem and the population consistency conditions, and prove existence of a selected Markovian mean field equilibrium under the stated assumptions, including a compact price set and an explicit tie-breaking rule. Numerical experiments show that the quadratic terminal penalty can generate an endogenous soft-boundary mechanism that discourages progressively deeper overselling. Under a low-cancellation stress case, linear penalties more strongly reduce the prevalence of terminal overselling, whereas quadratic penalties reduce its conditional depth and lower-tail severity. A time-varying cancellation experiment suggests that anticipated future inventory recovery can support lower early prices and greater temporary overbooking exposure. Under the adopted demand normalization, stronger mean-field coupling is associated with lower equilibrium prices and slower inventory depletion. Together, these results provide a tractable framework for analyzing pricing and overbooking incentives in competitive ticket markets with cancellations.
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BibTeX
@misc{chen2026mean,
title = {{Mean Field Games in Dynamic Ticket Pricing with Overselling and Cancellations}},
author = {Yuzhou Chen and Yumiharu Nakano},
howpublished = {arXiv},
year = {2026},
month = nov,
doi = {10.48550/arxiv.2611.02402},
eprint = {2611.02402},
archivePrefix = {arXiv},
url = {https://arxiv.org/abs/2611.02402},
}
RIS
TY - UNPB
TI - Mean Field Games in Dynamic Ticket Pricing with Overselling and Cancellations
AU - Yuzhou Chen
AU - Yumiharu Nakano
PY - 2026
DA - 2026/11/02
PB - arXiv
DO - 10.48550/arxiv.2611.02402
UR - https://arxiv.org/abs/2611.02402
AB - We extend a finite-state Mean Field Game model of dynamic ticket pricing to allow overselling, stochastic cancellations, and terminal penalties for unresolved negative inventory. Cancellations generate upward inventory transitions, producing a bidirectional inventory process coupled with firms' pricing decisions. We formulate the representative-firm control problem and the population consistency conditions, and prove existence of a selected Markovian mean field equilibrium under the stated assumptions, including a compact price set and an explicit tie-breaking rule. Numerical experiments show that the quadratic terminal penalty can generate an endogenous soft-boundary mechanism that discourages progressively deeper overselling. Under a low-cancellation stress case, linear penalties more strongly reduce the prevalence of terminal overselling, whereas quadratic penalties reduce its conditional depth and lower-tail severity. A time-varying cancellation experiment suggests that anticipated future inventory recovery can support lower early prices and greater temporary overbooking exposure. Under the adopted demand normalization, stronger mean-field coupling is associated with lower equilibrium prices and slower inventory depletion. Together, these results provide a tractable framework for analyzing pricing and overbooking incentives in competitive ticket markets with cancellations.
ER -