On the uniqueness and stability of equilibrium in quality-speed competition with boundedly-rational customers: The case with general reward function and multiple servers

Xin Li, Qingying Li, Pengfei Guo, Zhaotong Lian

Research output: Journal article publicationJournal articleAcademic researchpeer-review

6 Citations (Scopus)

Abstract

(2016) to the case with general reward function and multiple servers. The N servers make strategic decisions on their service rates sequentially and repeatedly. Since the competing servers' payoff functions can only be expressed by an implicit-function set, we propose a matrix method to derive the uniqueness of the equilibrium service rates, and we establish the stability of the equilibrium through a tatônnement scheme. By conducting a sensitivity analysis regarding the number of competing servers and the demand density, we find that the server competition benefits the customers by improving their utilities as well as getting more customers to be served. Furthermore, for a fixed demand density, the equilibrium service rate increases in the market size and converges to a certain level when the market size is large enough.
Original languageEnglish
Pages (from-to)726-736
Number of pages11
JournalInternational Journal of Production Economics
Volume193
DOIs
Publication statusPublished - 1 Nov 2017

Keywords

  • Bounded rationality
  • Customer-sensitive service
  • Matrix
  • Strategic queueing

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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