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Optimal Strategy and System Performance in a Feedback Queue with Customer-intensive Services and Boundedly Rational Customers

Author

Listed:
  • Yang Song

    (Nanjing University of Aeronautics and Astronautics)

  • Xinying Liu

    (Nanjing University of Aeronautics and Astronautics)

Abstract

In this paper, we consider a feedback queue with one server providing customer-intensive services. The service reward increases with service time, while extended service time results in longer waiting time. Customers are boundedly rational and decide whether to join the system based on a logit model upon their arrival. From the perspective of revenue maximization and social welfare maximization, this paper considers the trade-off between speed and quality of service, also studies the optimal service rate, service price and some system performances. Under two different strategies, we study the price of anarchy (PoA), i.e., the ratio of corresponding welfare, which quantifies the harm of service provider’s selfish behavior, and we obtain the interval of PoA and its characteristics. Additionally, we conduct numerical simulations to illustrate the quantitative outcomes of system operations.

Suggested Citation

  • Yang Song & Xinying Liu, 2025. "Optimal Strategy and System Performance in a Feedback Queue with Customer-intensive Services and Boundedly Rational Customers," Methodology and Computing in Applied Probability, Springer, vol. 27(1), pages 1-16, March.
    • Handle: RePEc:spr:metcap:v:27:y:2025:i:1:d:10.1007_s11009-025-10144-y
    DOI: 10.1007/s11009-025-10144-y
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