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Auctioning and Selling Positions: A Non-cooperative Approach to Queuing Conflicts

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Author Info

  • Rene van den Brink

    (VU University Amsterdam)

  • Youngsub Chun

    (Seoul National University, Korea)

  • Yuan Ju

    (University of York, United Kingdom)

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    Abstract

    Complementary to the axiomatic and mechanism design studies on queueing problems, this paper proposes a strategic bargaining approach to resolve queueing conflicts. Given a situation where players with different waiting costs have to form a queue in order to be served, they firstly compete with each other for a specific position in the queue. Then, the winner can decide to take up the position or sell it to the others. In the former case, the rest of the players will proceed to compete for the remaining positions in the same manner; whereas for the latter case the seller can propose a queue with corresponding payments to the others which can be accepted or rejected. Depending on which position players are going to compete for, the subgame perfect equilibrium outcome of the corresponding mechanism coincides with one of the two best known rules for queueing problems, t he maximal and the minimal transfer rules, while an efficient queue is always formed in equilibrium. The analysis discovers a striking relationship between pessimism and optimism in this type of decision making.

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    Bibliographic Info

    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 14-016/II.

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    Date of creation: 28 Jan 2014
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    Handle: RePEc:dgr:uvatin:20140016

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    Web page: http://www.tinbergen.nl

    Related research

    Keywords: Queueing problem; minimal transfer rule; maximal transfer rule; Shapley value; bidding mechanism; implementation; Queuing problem;

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    References

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    1. MISHRA, Debasis & RANGARAJAN, Bharath, 2005. "Cost sharing in a job scheduling problem," CORE Discussion Papers 2005053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Chun, Youngsub, 2006. "A pessimistic approach to the queueing problem," Mathematical Social Sciences, Elsevier, vol. 51(2), pages 171-181, March.
    3. van den Nouweland, A. & Borm, P. & van Golstein, W. & Bruinderink, R.G. & Tijs, S., 1994. "A Game Theoretic Approach to Problems in Telecommunication," Papers 9407, Tilburg - Center for Economic Research.
    4. Yuan Ju & David Wettstein, 2009. "Implementing cooperative solution concepts: a generalized bidding approach," Economic Theory, Springer, vol. 39(2), pages 307-330, May.
    5. René Brink & Youngsub Chun, 2012. "Balanced consistency and balanced cost reduction for sequencing problems," Social Choice and Welfare, Springer, vol. 38(3), pages 519-529, March.
    6. Maniquet, Francois, 2003. "A characterization of the Shapley value in queueing problems," Journal of Economic Theory, Elsevier, vol. 109(1), pages 90-103, March.
    7. David Pérez-Castrillo & David Wettstein, . "Bidding For The Surplus: A Non-Cooperative Approach To The Shapley Value," UFAE and IAE Working Papers 461.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    8. Youngsub Chun, 2011. "Consistency and monotonicity in sequencing problems," International Journal of Game Theory, Springer, vol. 40(1), pages 29-41, February.
    9. Youngsub Chun, 2006. "No-envy in queueing problems," Economic Theory, Springer, vol. 29(1), pages 151-162, September.
    10. Jeroen Suijs, 1996. "On incentive compatibility and budget balancedness in public decision making," Review of Economic Design, Springer, vol. 2(1), pages 193-209, December.
    11. Robert J. Dolan, 1978. "Incentive Mechanisms for Priority Queuing Problems," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 421-436, Autumn.
    12. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
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