We consider a general unobservable queueing model in which customers are allowed to join or balk upon arrival. The service provider charges the same admission fee to all joining customers. All joining customers receive the same reward and incur heterogeneous waiting cost rates. We show that the socially optimal arrival rate is greater than or equal to the profit maximizing arrival rate. Equivalently, the socially optimal admission fee is smaller than or equal to the profit maximizing admission fee.
- Optimal arrival rate
- Optimal price
- Unobservable queue
ASJC Scopus subject areas
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics