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

Ole Bueker; Bara Kim; Jeongsim Kim

doi:10.1016/j.orl.2020.01.007

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 journal › Article › peer-review

6 Citations (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 language	English
Pages (from-to)	152-156
Number of pages	5
Journal	Operations Research Letters
Volume	48
Issue number	2
DOIs	https://doi.org/10.1016/j.orl.2020.01.007
Publication status	Published - 2020 Mar

Bibliographical note

Funding Information:
We are grateful to the Area Editor and Associate Editor for 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 (MSIP) ( NRF-2017R1A2B4012676 ). 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, Republic of Korea ( 2017R1D1A1B03029542 ).

Publisher Copyright:
© 2020 Elsevier B.V.

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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10.1016/j.orl.2020.01.007

Cite this

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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.",

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N2 - 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.

AB - 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.

KW - Equilibrium strategy

KW - Optimal price

KW - Profit rate

KW - Social benefit rate

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

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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