An optimal mechanism charging for priority in a queue

Moshe Haviv; Eyal Winter

doi:https://doi.org/10.1016/j.orl.2020.03.010

An optimal mechanism charging for priority in a queue

Moshe Haviv, Eyal Winter

Department of Statistics

The Hebrew University of Jerusalem

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

Abstract

We derive a revenue-maximizing scheme that charges customers who are homogeneous with respect to their waiting cost parameter, for a random fee in order to become premium customers. This scheme incentivizes all customers to purchase priority, each at his/her drawn price. This is repeated for the case where customers are heterogeneous. The mechanisms are based on the fact that once some customers get priority, its value of the other gets even higher.

Original language	English
Pages (from-to)	304-308
Number of pages	5
Journal	Operations Research Letters
Volume	48
Issue number	3
DOIs	https://doi.org/10.1016/j.orl.2020.03.010
State	Published - May 2020

Keywords

Charging mechanisms
Priorities
Queues

All Science Journal Classification (ASJC) codes

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

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https://doi.org/10.1016/j.orl.2020.03.010

Cite this

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title = "An optimal mechanism charging for priority in a queue",

abstract = "We derive a revenue-maximizing scheme that charges customers who are homogeneous with respect to their waiting cost parameter, for a random fee in order to become premium customers. This scheme incentivizes all customers to purchase priority, each at his/her drawn price. This is repeated for the case where customers are heterogeneous. The mechanisms are based on the fact that once some customers get priority, its value of the other gets even higher.",

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An optimal mechanism charging for priority in a queue

Abstract

Keywords

All Science Journal Classification (ASJC) codes

Access to Document

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