Comparison of socially optimal and profit maximizing prices in an unobservable queue with heterogeneous waiting costs

Bara Kim; Jeongsim Kim

doi:10.1016/j.orl.2021.01.006

Comparison of socially optimal and profit maximizing prices in an unobservable queue with heterogeneous waiting costs

Bara Kim, Jeongsim Kim

Department of Mathematics

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	207-211
Number of pages	5
Journal	Operations Research Letters
Volume	49
Issue number	2
DOIs	https://doi.org/10.1016/j.orl.2021.01.006
Publication status	Published - 2021 Mar

Keywords

Optimal arrival rate
Optimal price
Unobservable queue

ASJC Scopus subject areas

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

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10.1016/j.orl.2021.01.006

Cite this

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title = "Comparison of socially optimal and profit maximizing prices in an unobservable queue with heterogeneous waiting costs",

abstract = "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.",

keywords = "Optimal arrival rate, Optimal price, Unobservable queue",

author = "Bara Kim and Jeongsim Kim",

note = "Funding Information: We are grateful to the Area Editor and the reviewer for their valuable comments and suggestions, which greatly improved this paper. B. Kim{\textquoteright}s research was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MSIT) (No. 2020R1A2B5B01001864 ). J. Kim{\textquoteright}s research was supported by Basic Science Research Program through the National Research Foundation of Korea (NRF) funded by the Ministry of Education (No. 2020R1F1A1A01065568 ) and was financially supported by the Research Year of Chungbuk National University in 2020, South Korea . Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",

year = "2021",

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doi = "10.1016/j.orl.2021.01.006",

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AU - Kim, Jeongsim

N1 - Funding Information: We are grateful to the Area Editor and the reviewer for their valuable comments and suggestions, which greatly improved this paper. B. Kim’s research was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MSIT) (No. 2020R1A2B5B01001864 ). J. Kim’s research was supported by Basic Science Research Program through the National Research Foundation of Korea (NRF) funded by the Ministry of Education (No. 2020R1F1A1A01065568 ) and was financially supported by the Research Year of Chungbuk National University in 2020, South Korea . Publisher Copyright: © 2021 Elsevier B.V.

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N2 - 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.

AB - 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.

KW - Optimal arrival rate

KW - Optimal price

KW - Unobservable queue

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DO - 10.1016/j.orl.2021.01.006

M3 - Article

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VL - 49

SP - 207

EP - 211

JO - Operations Research Letters

JF - Operations Research Letters

IS - 2

ER -

Comparison of socially optimal and profit maximizing prices in an unobservable queue with heterogeneous waiting costs

Abstract

Keywords

ASJC Scopus subject areas

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