IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v38y1990i5p870-883.html
   My bibliography  Save this article

Optimal Incentive-Compatible Priority Pricing for the M/M/1 Queue

Author

Listed:
  • Haim Mendelson

    (University of Rochester, Rochester, New York)

  • Seungjin Whang

    (Stanford University, Stanford, California)

Abstract

Consider a system that is modeled as an M/M/1 queueing system with multiple user classes. Each class is characterized by its delay cost per unit of time, its expected service time and its demand function. This paper derives a pricing mechanism which is optimal and incentive-compatible in the sense that the arrival rates and execution priorities jointly maximize the expected net value of the system while being determined, on a decentralized basis, by individual users. A closed-form expression for the resulting price structure is presented and studied.

Suggested Citation

  • Haim Mendelson & Seungjin Whang, 1990. "Optimal Incentive-Compatible Priority Pricing for the M/M/1 Queue," Operations Research, INFORMS, vol. 38(5), pages 870-883, October.
    • Handle: RePEc:inm:oropre:v:38:y:1990:i:5:p:870-883
    DOI: 10.1287/opre.38.5.870
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.38.5.870
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.38.5.870?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:38:y:1990:i:5:p:870-883. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.