Finance Papers

Document Type

Journal Article

Date of this Version

1-2014

Publication Source

Operations Research

Volume

62

Issue

1

Start Page

38

Last Page

57

DOI

10.1287/opre.2013.1232

Abstract

In the operations research literature, the queue joining probability is monotonic decreasing in the queue length; the longer the queue, the fewer consumers join. Recent academic and empirical evidence indicates that queue-joining probabilities may not always be decreasing in the queue length. We provide a simple explanation for these nonmonotonic queue-joining strategies by relaxing the informational assumptions in Naor's model. Instead of imposing that the expected service time and service value are common knowledge, we assume that they are unknown to consumers, but positively correlated. Under such informational assumptions, the posterior expected waiting cost and service value increase in the observed queue length. As a consequence, we show that queue-joining equilibria may emerge for which the joining probability increases locally in the queue length. We refer to these as “sputtering equilibria.” We discuss when and why such sputtering equilibria exist for discrete as well as continuously distributed priors on the expected service time (with positively correlated service value).

Copyright/Permission Statement

https://doi.org/10.1287/opre.2013.1232

Keywords

queueing games, threshold policies, nonmonotone queue joining, randomization

Embargo Date

8-24-2014

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Date Posted: 27 November 2017

This document has been peer reviewed.