Optimal incentive-compatible priority pricing for the M/M/1 queue
Operations Research
Pricing Services Subject to Congestion: Charge Per-Use Fees or Sell Subscriptions?
Manufacturing & Service Operations Management
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Although the norm in many retail banks is to serve customers on a first-come, first-served basis, some customers try to cut the line, usually by providing an excuse for their urgency. In other queues, however, this behavior is considered unacceptable and is aggressively banned. In all of these cases, customer exhibit strategies that have not yet been explored in the operations literature: they choose whether or not to cut the line and must also decide whether to accept or reject such intrusions by others. This paper derives conditions for the emergence of such behavior in equilibrium among the customers themselves, i.e., when the queue manager is not involved in granting priorities and the customers have to use community enforcement to sustain such equilibria. This paper was accepted by Yossi Aviv, operations management.