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Purchasing Priorities in Queues

Author

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  • K. R. Balachandran

    (University of Wisconsin)

Abstract

A class of queueing problems is introduced in which each customer can purchase preferential treatment by making a payment. Each customer is assumed to select his payment so as to minimize his own expected cost, without regard for global considerations. A payment policy determines a customer's payment as a function of the information available. A payment policy is said to be stable if no one customer can reduce his expected cost by deviating from it, provided that all other customers follow it. The existence of stable payment policies which are not globally optimal is demonstrated in examples based on the M/M/1 queue.

Suggested Citation

  • K. R. Balachandran, 1972. "Purchasing Priorities in Queues," Management Science, INFORMS, vol. 18(5-Part-1), pages 319-326, January.
    • Handle: RePEc:inm:ormnsc:v:18:y:1972:i:5-part-1:p:319-326
    DOI: 10.1287/mnsc.18.5.319
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    Cited by:

    1. Philipp Afèche & Haim Mendelson, 2004. "Pricing and Priority Auctions in Queueing Systems with a Generalized Delay Cost Structure," Management Science, INFORMS, vol. 50(7), pages 869-882, July.
    2. Chamberlain, Jonathan & Simhon, Eran & Starobinski, David, 2021. "Preemptible queues with advance reservations: Strategic behavior and revenue management," European Journal of Operational Research, Elsevier, vol. 293(2), pages 561-578.
    3. Jay Pil Choi & Byung‐Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471, September.
    4. Zhongbin Wang & Luyi Yang & Shiliang Cui & Jinting Wang, 2021. "In-queue priority purchase: a dynamic game approach," Queueing Systems: Theory and Applications, Springer, vol. 97(3), pages 343-381, April.
    5. repec:vuw:vuwscr:19111 is not listed on IDEAS
    6. Apostolos Burnetas, 2013. "Customer equilibrium and optimal strategies in Markovian queues in series," Annals of Operations Research, Springer, vol. 208(1), pages 515-529, September.
    7. Nilay Tan{i}k Argon & Serhan Ziya, 2009. "Priority Assignment Under Imperfect Information on Customer Type Identities," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 674-693, June.
    8. Jay Pil Choi & Byung‐Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471, September.
    9. Rajat Talak & D. Manjunath & Alexandre Proutiere, 2019. "Strategic arrivals to queues offering priority service," Queueing Systems: Theory and Applications, Springer, vol. 92(1), pages 103-130, June.
    10. Manlu Chen & Ming Hu & Jianfu Wang, 2022. "Food Delivery Service and Restaurant: Friend or Foe?," Management Science, INFORMS, vol. 68(9), pages 6539-6551, September.
    11. S. Rao & E. R. Petersen, 1998. "Optimal Pricing of Priority Services," Operations Research, INFORMS, vol. 46(1), pages 46-56, February.
    12. Moshe, Shir & Oz, Binyamin, 2023. "Charging more for priority via two-part tariff for accumulating priorities," European Journal of Operational Research, Elsevier, vol. 304(2), pages 652-660.
    13. Thomas Kittsteiner & Benny Moldovanu, 2005. "Priority Auctions and Queue Disciplines That Depend on Processing Time," Management Science, INFORMS, vol. 51(2), pages 236-248, February.
    14. Moshe Haviv & Liron Ravner, 2016. "Strategic bidding in an accumulating priority queue: equilibrium analysis," Annals of Operations Research, Springer, vol. 244(2), pages 505-523, September.
    15. Shone, Rob & Knight, Vincent A. & Williams, Janet E., 2013. "Comparisons between observable and unobservable M/M/1 queues with respect to optimal customer behavior," European Journal of Operational Research, Elsevier, vol. 227(1), pages 133-141.
    16. Choi, Jay & Kim, Byung-Cheol, 2008. "Net Neutrality and Investment Incentives," Working Paper Series 19111, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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