Equilibrium Analysis for Batch Service Queueing Systems with Strategic Choice of Batch Size

Ayane Nakamura and Tuan Phung-Duc ()
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Ayane Nakamura: Graduate School of Science and Technology, University of Tsukuba, Tsukuba 305-8573, Japan
Tuan Phung-Duc: Institute of Systems and Information Engineering, University of Tsukuba, Tsukuba 305-8573, Japan

Mathematics, 2023, vol. 11, issue 18, 1-22

Abstract: Various transportation services exist, such as ride-sharing or shared taxis, in which customers receive services in a batch of flexible sizes and share fees. In this study, we conducted an equilibrium analysis of a variable batch service model in which customers who observe no waiting customers in an incomplete batch can strategically select a batch size to maximize the individual utilities. We formulated this model as a three-dimensional Markov chain and created a book-type transition diagram. To consider the joining/balking dilemma of customers for this model, we proposed an effective algorithm to construct a necessary and sufficient size of state space for the Markov chain provided that all customers adopt the threshold-type equilibrium strategy. Moreover, we proved that the best batch size is a non-decreasing function for i if the reward for the completion of batch service with size l is an increasing function of l assuming that a tagged customer observes i complete batches in the system upon arrival; in other words, the fee decreases as the batch becomes larger. We then derive several performance measures, such as throughput, social welfare, and monopolist’s revenue. Throughout the numerical experiment, a comparison between the present variable batch service model and regular batch service model in which customers were served in a constant batch, was discussed. It was demonstrated that the three performance measures can be optimized simultaneously in the variable batch service model, as long as the fee was set relatively high.

Keywords: queues with strategic customers; nash equilibrium; batch service; variable batch size; strategic choice of batch size; social optimization; revenue management (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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