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Strategic Behavior and Social Outcomes in a Bottleneck Queue: Experimental Evidence

We consider a class of three-player queuing games where players independently choose when to arrive at a bottleneck facility that serves only one at a time. Players are impatient for service but cannot arrive before the facility opens and they dislike time spent in queue. We derive the equilibrium arrivals under the first-in-first-out (FIFO), last-in-first-out (LIFO), and service-in-random-order (SIRO) queue disciplines and compare these equilibrium predictions to outcomes from a laboratory experiment. LIFO provides higher equilibrium welfare than FIFO and SIRO since the players arrive such that lower congestion is induced. Experimental evidence confirms that employing different queue disciplines indeed affects the strategic behavior of players and thereby the level of congestion. The experimental participants do not, however, behave as prescribed by the equilibrium predictions. They obtain significantly higher welfare than prescribed by equilibrium under all queue disciplines. Our results moreover suggest that people perceive LIFO as the most unfair of the three disciplines although the theoretical results suggest that it is welfare optimal.

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File URL: http://static.sdu.dk/mediafiles//4/3/F/%7B43F80C9B-3533-4838-9E08-DE09931B9379%7Ddpbe12_2014.pdf
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Paper provided by Department of Business and Economics, University of Southern Denmark in its series Discussion Papers of Business and Economics with number 12/2014.

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Length: 35 pages
Date of creation: 13 Aug 2014
Date of revision:
Handle: RePEc:hhs:sdueko:2014_012
Contact details of provider: Postal: Department of Business and Economics, University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Phone: 65 50 32 33
Fax: 65 50 32 37
Web page: http://www.sdu.dk/ivoe
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  5. Platz, Trine Tornøe & Østerdal, Lars Peter, 2012. "The curse of the first-in-first-out queue discipline," Discussion Papers of Business and Economics 10/2012, Department of Business and Economics, University of Southern Denmark.
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  8. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-79, March.
  9. Rapoport, Amnon & Stein, William E. & Parco, James E. & Seale, Darryl A., 2004. "Equilibrium play in single-server queues with endogenously determined arrival times," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 67-91, September.
  10. Hassin, Refael, 1985. "On the Optimality of First Come Last Served Queues," Econometrica, Econometric Society, vol. 53(1), pages 201-02, January.
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  12. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, June.
  13. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
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