 Market sharing dynamics between two service providersOlivier Gallay and Max-Olivier Hongler European Journal of Operational Research, 2008, vol. 190, issue 1, 241-254 Abstract: We study the market partition between two distinct firms that deliver services to waiting time sensitive customers. In our model, the incoming customers select a firm on the basis of its posted price, the expected waiting time and its brand. More specifically, we quantify by a cost any departure from the ideal brand expected by each incoming customer. Considering that the two underlying queueing processes operate under high traffic regimes, we analyze the market sharing dynamics by using a diffusion process. As a function of control parameters, such as the waiting and brand departure costs or the incoming traffic intensity, we are able to analytically characterize a transition between an Hotelling-like regime (dominated by brand considerations) and a deadline type regime (dominated by waiting time considerations). The market sharing dynamics is described by the time evolution of a boundary point, which time evolution belongs to the class of noise-induced phase transitions, so far widely discussed in physics, chemistry and biology. Explicit illustrations for both symmetric (i.e. identical servers) and asymmetric cases are worked out. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:190:y:2008:i:1:p:241-254 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.