Customer equilibrium and optimal pricing in an M/G/1 queue with heterogeneous rewards and waiting cost rates

Ole Bueker, Bara Kim, Jeongsim Kim

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We consider an unobservable M/G/1 queue 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 a reward from completion of service and incur a waiting cost. The reward and waiting cost rate are random, however the customers know their own values upon arrival. We characterize the customer's equilibrium strategy and the optimal prices associated with profit and social welfare maximization.

Original languageEnglish
Pages (from-to)152-156
Number of pages5
JournalOperations Research Letters
Volume48
Issue number2
DOIs
Publication statusPublished - 2020 Mar

Keywords

  • Equilibrium strategy
  • Optimal price
  • Profit rate
  • Social benefit rate

ASJC Scopus subject areas

  • Software
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering
  • Applied Mathematics

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