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Incentive Mechanisms for Priority Queuing Problems

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  • Robert J. Dolan

Abstract

We consider the development of an incentive mechanism to induce users of a service facility to reveal the parameters the system administrator requires to determine the optimal sequence of service to queued users. We first consider using the taxation procedure recently suggested for public goods, and then develop a more efficient mechanism based on marginal delay costs. We prove that setting the priority price for service equal to the marginal delay cost imposed on others structures a situation such that a user maximizes his individual welfare revealing his true delay cost.

Suggested Citation

  • Robert J. Dolan, 1978. "Incentive Mechanisms for Priority Queuing Problems," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 421-436, Autumn.
  • Handle: RePEc:rje:bellje:v:9:y:1978:i:autumn:p:421-436
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    Cited by:

    1. repec:spr:joptap:v:148:y:2011:i:2:d:10.1007_s10957-010-9750-x is not listed on IDEAS
    2. Conan Mukherjee, 2013. "Weak group strategy-proof and queue-efficient mechanisms for the queueing problem with multiple machines," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(1), pages 131-163, February.
    3. 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.
    4. Ju, Yuan & Chun, Youngsub & van den Brink, René, 2014. "Auctioning and selling positions: A non-cooperative approach to queueing conflicts," Journal of Economic Theory, Elsevier, vol. 153(C), pages 33-45.
    5. Hougaard, Jens Leth & Moreno-Ternero, Juan D. & Østerdal, Lars Peter, 2014. "Assigning agents to a line," Games and Economic Behavior, Elsevier, vol. 87(C), pages 539-553.
    6. Dirk Bergemann & Juuso V‰lim‰ki, 2010. "The Dynamic Pivot Mechanism," Econometrica, Econometric Society, vol. 78(2), pages 771-789, March.
    7. Zhang, Jian & Nault, Barrie R. & Tu, Yiliu, 2015. "A dynamic pricing strategy for a 3PL provider with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 169(C), pages 31-43.
    8. Chun, Youngsub & Mitra, Manipushpak, 2014. "Subgroup additivity in the queueing problem," European Journal of Operational Research, Elsevier, vol. 238(1), pages 281-289.
    9. Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    10. repec:spr:joecth:v:64:y:2017:i:2:d:10.1007_s00199-016-0983-2 is not listed on IDEAS
    11. Parikshit De & Manipushpak Mitra, 2017. "Incentives and justice for sequencing problems," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(2), pages 239-264, August.
    12. Dirk Bergemann & Juuso Valimaki, 2017. "Dynamic Mechanism Design: An Introduction," Cowles Foundation Discussion Papers 2102R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2018.
    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. Jan A. Van Mieghem, 2000. "Price and Service Discrimination in Queuing Systems: Incentive Compatibility of Gc\mu Scheduling," Management Science, INFORMS, vol. 46(9), pages 1249-1267, September.
    15. Moulin, Hervé, 2008. "Proportional scheduling, split-proofness, and merge-proofness," Games and Economic Behavior, Elsevier, vol. 63(2), pages 567-587, July.
    16. Vernon N. Hsu & Susan H. Xu & Boris Jukic, 2009. "Optimal Scheduling and Incentive Compatible Pricing for a Service System with Quality of Service Guarantees," Manufacturing & Service Operations Management, INFORMS, vol. 11(3), pages 375-396, May.
    17. Dale O. Stahl, 2002. "The Inefficiency of First and Second Price Auctions in Dynamic Stochastic Environments," Netnomics, Springer, vol. 4(1), pages 1-18, March.
    18. Gershkov, Alex & Moldovanu, Benny, 2012. "Dynamic allocation and pricing: A mechanism design approach," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 283-286.

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