Strategic bidding in an accumulating priority queue: equilibrium analysis

Moshe Haviv () and Liron Ravner ()
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Moshe Haviv: The Hebrew University of Jerusalem
Liron Ravner: The Hebrew University of Jerusalem

Annals of Operations Research, 2016, vol. 244, issue 2, No 11, 505-523

Abstract: Abstract We study the strategic purchasing of priorities in a time-dependent accumulating priority M/G/1 queue. We formulate a non-cooperative game in which customers purchase priority coefficients with the goal of reducing waiting costs in exchange. The priority of each customer in the queue is a linear function of the individual waiting time, with the purchased coefficient being the slope. The unique pure Nash equilibrium is solved explicitly for the case with homogeneous customers. A general characterisation of the Nash equilibrium is provided for the heterogeneous case. It is shown that both avoid the crowd and follow the crowd behaviors are prevalent, within class types and between them. We further present a pricing mechanism that ensures the order of the accumulating priority rates in equilibrium follows a $$C\mu $$ C μ type rule and improves overall efficiency.

Keywords: Queueing games; Dynamic priority; Strategic priority purchasing; Queue priority pricing; 60K25; 90B22; 91A13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10479-016-2141-4

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