A model for equilibrium in some service-provider user-set interactions

Nandyala Hemachandra (), Kamma Sri Naga Rajesh () and Mohd. Abdul Qavi ()
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Nandyala Hemachandra: Indian Institute of Technology Bombay
Kamma Sri Naga Rajesh: Carnegie Mellon University
Mohd. Abdul Qavi: JDA Software

Annals of Operations Research, 2016, vol. 243, issue 1, No 8, 95-115

Abstract: Abstract We propose a model for interaction between a user-set (market) and a service-provider (firm) when the offered demand is sensitive to the offered Quality of Service which in turn depends on the offered demand. We show that, under fairly mild conditions, an equilibrium point or an equilibrium set exists either when the service-provider bases its operational decisions as per a revenue optimal policy of an average reward Markov decision model or when it uses a discounted reward Markov decision model. We also consider the cases when the firm has to meet functional constraints on consumption of resources for its operations. If an equilibrium set exists, then the interaction can suitably be interpreted as one explanation of the business cycles phenomena. We illustrate these and related issues via a model for vehicle relocation system which may be of independent interest.

Keywords: Fixed points; Multi-chain MDPs; Quality of Service; Business cycles; Constrained MDPs; Parametrized LPs; Vehicle relocation; USD policies; Parametrized MDPs; Large scale LPs (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10479-015-2037-8

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