Minimizing equilibrium expected sojourn time via performance-based mixed threshold demand allocation in a multiple-server queueing environment

Sin Man Choi, Ximin Huang, Wai Ki Ching

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

We study the optimal demand allocation policies to induce high service capacity and achieve minimum expected sojourn times in equilibrium in a queueing system with multiple strategic servers. We propose the mixed threshold allocation policy as an optimal state-dependent policy that induces optimal service capacity from strategic servers. Compensation to the server can be paid at customer allocation or upon job completion. Our study focuses on the use of a multiple-server mixed threshold allocation policy to replicate the demand of a given state-independent policy to achieve a symmetric equilibrium with lower expected sojourn time. The results indicate that, under both payment schemes, for any given multiple-server state-independent policy, there exists a multiple-server threshold policy that produces identical demand allocation and Nash equilibrium (if any). Moreover, the policy can be designed to minimize the expected sojourn time at a symmetric equilibrium. Further-more, under the payment-at-allocation scheme, our results, combining with existing results on the optimality of the multiple-server linear allocation policy, show that the mixed threshold policy can achieve the maximum feasible service capacity and thus the minimum feasible equilibrium expected sojourn time. Hence, our results agree with previous two-server results and affirm that a trade-off between incentives and efficiency need not exist in the case of multiple servers.

Original languageEnglish (US)
Pages (from-to)299-323
Number of pages25
JournalJournal of Industrial and Management Optimization
Volume8
Issue number2
DOIs
StatePublished - May 2012

Keywords

  • Demand allocation
  • Principal-agent problem
  • Queueing system
  • Strategic server
  • Threshold allocation

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