Incentive Mechanisms for Priority Queuing Problems

Robert J. Dolan

Bell Journal of Economics, 1978, vol. 9, issue 2, 421-436

Abstract: We consider the development of an incentive mechanism to induce users of a service facility to reveal the parameters the system administrator requires to determine the optimal sequence of service to queued users. We first consider using the taxation procedure recently suggested for public goods, and then develop a more efficient mechanism based on marginal delay costs. We prove that setting the priority price for service equal to the marginal delay cost imposed on others structures a situation such that a user maximizes his individual welfare revealing his true delay cost.

Date: 1978
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