Optimal Queue Design

Yeon-Koo Che and Olivier Tercieux

Journal of Political Economy, 2026, vol. 134, issue 8, 2395 - 2440

Abstract: We study optimal service allocation through queues when agents have homogeneous preferences and must be incentivized to enter and remain in the queue. The designer controls entry, exit, service priority, and information about queue priorities. Under a mild regularity condition, the optimal mechanism admits agents only up to a cutoff queue length, never removes admitted agents, serves them according to a first-come, first-served (FCFS) rule, and provides no information beyond recommendations. FCFS is also necessary for optimality in a rich domain. The result identifies a new role for queue disciplines in regulating agents’ beliefs and dynamic incentives, and uncovers a hitherto unrecognized virtue of FCFS in this regard.

Date: 2026
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