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Incentive Effects of Multiple-Server Queueing Networks: The Principal-Agent Perspective

Published online by Cambridge University Press:  28 May 2015

Sin-Man Choi ,
Ximin Huang ,
Wai-Ki Ching  and
Min Huang
Sin-Man Choi*
Affiliation:
Department of Industrial Engineering and Operations Research, University of California, Berkeley, US
Ximin Huang*
Affiliation:
College of Management, Georgia Institute of Technology, Atlanta, US
Wai-Ki Ching*
Affiliation:
Advanced Modeling and Applied Computing Laboratory, Department of Mathematics, The University of Hong Kong, Pokfulam Road, Hong Kong
Min Huang*
Affiliation:
College of Information Science and Engineering, Northeastern University; State Key Laboratory of Synthetical Automation for Process Industries, (Northeastern University), Shenyang, Liaoning, 110819, China
*
Corresponding author. Email: [email protected]
Corresponding author. Email: [email protected]
Corresponding author. Email: [email protected]
Corresponding author. Email: [email protected]
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Abstract

A two-server service network has been studied from the principal-agent perspective. In the model, services are rendered by two independent facilities coordinated by an agency, which seeks to devise a strategy to suitably allocate customers to the facilities and to simultaneously determine compensation levels. Two possible allocation schemes were compared — viz. the common queue and separate queue schemes. The separate queue allocation scheme was shown to give more competition incentives to the independent facilities and to also induce higher service capacity. In this paper, we investigate the general case of a multiple-server queueing model, and again find that the separate queue allocation scheme creates more competition incentives for servers and induces higher service capacities. In particular, if there are no severe diseconomies associated with increasing service capacity, it gives a lower expected sojourn time in equilibrium when the compensation level is sufficiently high.

Keywords

60K2568M2091A80Capacity allocationcompetitionincentive theoryMarkovian queueing systemsNash equilibriumprincipal agent
Type
Review Article
Information
East Asian Journal on Applied Mathematics , Volume 1 , Issue 4 , November 2011 , pp. 379 - 402
Copyright
Copyright © Global-Science Press 2011

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