Matching Impatient and Heterogeneous Demand and Supply

Angelos Aveklouris (), Levi DeValve (), Maximiliano Stock () and Amy Ward ()
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Angelos Aveklouris: Booth School of Business, University of Chicago, Chicago, Illinois 60637
Levi DeValve: Booth School of Business, University of Chicago, Chicago, Illinois 60637
Maximiliano Stock: Booth School of Business, University of Chicago, Chicago, Illinois 60637
Amy Ward: Booth School of Business, University of Chicago, Chicago, Illinois 60637

Operations Research, 2025, vol. 73, issue 3, 1637-1658

Abstract: Service platforms must determine rules for matching heterogeneous demand (customers) and supply (workers) that arrive randomly over time and may be lost if forced to wait too long for a match. Our objective is to maximize the cumulative value of matches, minus costs incurred when demand and supply wait. We develop a fluid model, that approximates the evolution of the stochastic model and captures explicitly the nonlinear dependence between the amount of demand and supply waiting and the distribution of their patience times, also known as reneging or abandonment times in the literature. The fluid model-invariant states approximate the steady-state mean queue lengths in the stochastic system and, therefore, can be used to develop an optimization problem whose optimal solution provides matching rates between demand and supply types that are asymptotically optimal (on fluid scale as demand and supply rates grow large). We propose a discrete review matching policy that asymptotically achieves the optimal matching rates. We further show that, when the aforementioned matching optimization problem has an optimal extreme point solution, which occurs when the patience time distributions have increasing hazard rate functions, a state-independent priority policy that ranks the edges on the bipartite graph connecting demand and supply is asymptotically optimal. A key insight from this analysis is that the ranking critically depends on the patience time distributions and may be different for different distributions even if they have the same mean, demonstrating that models assuming, for example, exponential patience times for tractability, may lack robustness. Finally, we observe that, when holding costs are zero, a discrete review policy that does not require knowledge of interarrival and patience time distributions is asymptotically optimal.

Keywords: Stochastic Models; matching; two-sided platforms; bipartite graph; discrete review policy; high-volume setting; fluid model; impatience; reneging; abandonment (search for similar items in EconPapers)
Date: 2025
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