Social Interactions in Queueing Systems: Pricing Decision with Reference Time Effect

Tao Jiang (), Zitong Zhang and Xudong Chai
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Tao Jiang: Shandong University of Science and Technology
Zitong Zhang: Shandong University of Science and Technology
Xudong Chai: Anhui Polytechnic University

Methodology and Computing in Applied Probability, 2025, vol. 27, issue 1, 1-26

Abstract: Abstract In social interactions, customer decisions are often influenced by the behavior of others. When multiple customers make the same purchasing decision within a socially interactive environment, their perceived utility of the service increases. Additionally, customers develop a reference time utility based on their patience time and the expected waiting time, which influences their valuation of the service. Using an M/M/1 queueing model, this study examines how reference time utility affects customer queueing decisions and the service provider's pricing strategy under social interactions, considering both homogeneous and heterogeneous customers. The findings demonstrate that the social interaction sensitivity and the customer patience time will affect the social interaction utility and the reference time utility, which in turn affects the queueing behavior of customers and the service pricing and revenue of the service provider. Numerical examples are presented to validate the theoretical findings and provide actionable managerial insights for service providers.

Keywords: Social interaction; Reference time effect; Customer strategic behavior; Queueing model; Pricing decision (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11009-025-10140-2

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