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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
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    File URL: http://dx.doi.org/10.1287/mnsc.18.5.319
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    References listed on IDEAS

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    1. M. E. Salveson, 1956. "A Problem in Optimal Machine Loading," Management Science, INFORMS, vol. 2(3), pages 232-260, April.
    2. M. Beckman & R. Muth, 1956. "An Inventory Policy for a Case of Lagged Delivery," Management Science, INFORMS, vol. 2(2), pages 145-155, January.
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    Cited by:

    1. Jay Pil Choi & Byung-Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471.
    2. Thomas Kittsteiner & Benny Moldovanu, 2005. "Priority Auctions and Queue Disciplines That Depend on Processing Time," Management Science, INFORMS, pages 236-248.
    3. Thomas Kittsteiner & Benny Moldovanu, 2005. "Priority Auctions and Queue Disciplines That Depend on Processing Time," Management Science, INFORMS, pages 236-248.
    4. 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.

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