A Dynamic Queuing Model
26 Pages Posted: 29 Sep 2007
Date Written: February 2005
This paper proposes a dynamic queuing model in which excess demand is cleared through multiple shifts. Due to differences in valuation and costs, some consumers choose to compete in queues for early consumption, while others avoid queues by late consumption. A unique efficient rational expectations equilibrium is shown to exist and some general characteristics of the queuing equilibrium are analyzed. The theory is then applied to some interesting realistic situations such as shopping, highways, and restaurants.
Keywords: Queuing, Heterogenous Preferences, Heterogenous Discount
JEL Classification: D11, C72
Suggested Citation: Suggested Citation