Optimal Measurement-based Pricing for an M/M/1 Queue
In this paper, we consider a system modelled as an M/M/1 queue. Jobs corresponding to different classes are sent to the queue and are characterized by a delay cost per unit of time and a demand function. Our goal is to design an optimal pricing scheme for the queue, where the total charge depends on both the mean delay at the queue and arrival rate of each customer. We also assume that those two values have to be (statistically) measured, introducing errors on the total charge that might avert jobs from using the system, and then decrease demand. This model can be applied in telecommunication networks, where pricing can be used to control congestion, and the network can be characterized by a single bottleneck queue; the throughput of each class would be determined through passive measurements while the delay would be determined through active measurements. Copyright Springer Science+Business Media, LLC 2007
Volume (Year): 7 (2007)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/regional+science/journal/11067/PS2|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Albert Y. Ha, 2001. "Optimal Pricing That Coordinates Queues with Customer-Chosen Service Requirements," Management Science, INFORMS, vol. 47(7), pages 915-930, July.
- Sanjeev Dewan & Haim Mendelson, 1990. "User Delay Costs and Internal Pricing for a Service Facility," Management Science, INFORMS, vol. 36(12), pages 1502-1517, December.
- Yasushi Masuda & Seungjin Whang, 2002. "Capacity Management in Decentralized Networks," Management Science, INFORMS, vol. 48(12), pages 1628-1634, December.
When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:7:y:2007:i:2:p:177-195. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.