Unit:
Κατεύθυνση Στατιστική και Επιχειρησιακή ΈρευναLibrary of the School of Science
Author:
Barmpagiannis Ioannis
Supervisors info:
Οικονόμου Αντώνιος, Καθηγητής, Τμήμα Μαθηματικών, ΕΚΠΑ
Original Title:
Στρατηγική Συμπεριφορά Σε Συστήματα Εξυπηρέτησης Με Περιορισμένη Ευθυκρισία/Ορθολογικότητα Πελατών
Translated title:
Strategic Behavior In Queueing Systems With Bounded Customer Rationality
Summary:
The world around us is full of service systems and processes that can be reduced to service
systems. Therefore, these systems are important for our lives and their study is, apart from being
very interesting, also necessary. Thus, relatively recently in 1967 Naor studied the strategic
behavior of customers in an M/M/1 queue (i.e., the process of customer arrivals is Poisson,
service times are exponential, there is one server in the system, the capacity is infinite and the
queuing discipline is FCFS - first-come, first-served) in terms of the decision the customer must
make, whether or not to enter the system. This work was also the first in which customers
behave strategically but assuming that customers are fully rational. The literature developed
since then has been based on the exact same assumption that customers are fully rational and
able to perfectly estimate their expected waiting time and thus the expected utility of entering
the system. However, this assumption is unrealistic in most service systems. Consequently, it was
necessary to study service systems where customers are not fully rational. Recently Huang, Allon,
and Bassamboo (2013) studied M/M/1 queuing assuming that customers are boundedly rational.
They distinguished two cases: the observable case where customers can observe the length of
the queue and the unobservable case where customers cannot observe the length of the queue
before making the decision to enter or not. They investigated the impact of bounded rationality
both from the point of view of the firm for maximizing revenue and from the point of view of
the ‘social planner’ for maximizing social welfare for both the above cases. They also examined
differences in outcomes while ignoring bounded rationality. This work by Huang, Allon, and
Bassamboo (2013) further developed the literature on bounded rationality with the important
work of Canbolat (2020) studying the impact of bounded rationality on clearing systems. It also
adds another more realistic assumption that customers are non-homogeneous. In our paper, in
Part I we list basic historical facts about strategic behavior in general, and some basic elements
of game theory that will be used in Part II. Part II consists of two Chapters where in the first
(Chapter 2) we list the results and conclusions of the work of Huang, Allon and Bassamboo
(2013) in the second (Chapter 3) we list the results and conclusions of the work of Canbolat
(2020). Finally, in the Appendix we list the proofs of Huang, Allon, and Bassamboo (2013) for
the Propositions and Conclusions of their paper (Appendix A) and the proofs of Canbolat (2020)
for the Propositions and Conclusions of her paper (Appendix B).
Main subject category:
Science
Keywords:
service system, M/M/1 queue, strategic behavior, observable case, unobservable case, bounded rationality, level of bounded rationality, degree of rationality, fully rational customers, boundedly rational customers, equilibrium, customer utility, system revenue, social welfare, social planner, maximizing revenue price, clearing systems, non-homogeneous customers
