Strategic arrivals to queues offering priority service
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11134_2019_9604_ReferencePDF.pdf
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437.37 KB
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121b042eccb1675886e9643e3a7c5c75
Author(s)
Talak, Rajat
Manjunath, D.
Proutiere, Alexandre
Date Issued
February 22, 2019
Publisher
Springer US
Version
Author's final manuscript
Abstract
Abstract
We consider strategic arrivals to a FCFS service system that starts service at a fixed time and has to serve a fixed number of customers, for example, an airplane boarding system. Arriving early induces a higher waiting cost (waiting before service begins) while arriving late induces a cost because earlier arrivals take the better seats. We first consider arrivals of heterogenous customers that choose arrival times to minimize the weighted sum of waiting cost and cost due to expected number of predecessors. We characterize the unique Nash equilibria for this system. Next, we consider a system offering L levels of priority service with a FCFS queue for each priority level. Higher priorities are charged higher admission prices. Customers make two choices—time of arrival and priority of service. We show that the Nash equilibrium corresponds to the customer types being divided into L intervals and customers belonging to each interval choosing the same priority level. We further analyze the net revenue to the server and consider revenue maximizing strategies—number of priority levels and pricing. Numerical results show that with only a small number of queues (two or three) the server can obtain nearly the maximum revenue.
MIT Department
Massachusetts Institute of Technology. Department of Aeronautics and Astronautics
Massachusetts Institute of Technology. Laboratory for Information and Decision Systems
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1007/s11134-019-09604-3
