Efficient Ignorance: Information Heterogeneity in a Queue

45 Pages Posted: 27 Jul 2014 Last revised: 9 Nov 2016

See all articles by Ming Hu

Ming Hu

University of Toronto - Rotman School of Management

Yang Li

University of Western Ontario - Richard Ivey School of Business

Jianfu Wang

City University of Hong Kong

Date Written: May 3, 2016

Abstract

How would the growing prevalence of real-time delay information affect a service system? We consider a single-server queueing system where customers arrive according to a Poisson process and the service time follows an exponential distribution. There are two streams of customers, one informed about real-time delay and the other uninformed. The customers' uninformed behavior may be due to information ignorance or rational behavior in the presence of an information fee. We characterize the equilibrium behavior of customers with information heterogeneity and investigate how the presence of a larger fraction of informed customers affects the system performance measures, i.e., throughput and social welfare. We show that the effects of growing information prevalence on system performance measures are determined by the equilibrium joining behavior of uninformed customers. Perhaps surprisingly, we find that throughput and social welfare can be unimodal in the fraction of informed customers. In other words, some amount of information heterogeneity in the population can lead to strictly more efficient outcomes, in terms of the system throughput or social welfare, than information homogeneity. For example, under a very mild condition, throughput in a system with an offered load of 1 will always suffer if there are more than 58% of informed customers in the population. Moreover, it is shown that for an overloaded system with offered load sufficiently higher than 1, social welfare always reaches its maximum when some fraction of customers are uninformed of the congestion in real time.

Keywords: Service Operations; Queueing System; Information Heterogeneity; Non-Monotonic Behavior

Suggested Citation

Hu, Ming and Li, Yang and Wang, Jianfu, Efficient Ignorance: Information Heterogeneity in a Queue (May 3, 2016). Rotman School of Management Working Paper No. 2472107, Available at SSRN: https://ssrn.com/abstract=2472107 or http://dx.doi.org/10.2139/ssrn.2472107

Ming Hu

University of Toronto - Rotman School of Management ( email )

105 St. George st
Toronto, ON M5S 3E6
Canada
416-946-5207 (Phone)

HOME PAGE: http://ming.hu

Yang Li (Contact Author)

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

Jianfu Wang

City University of Hong Kong ( email )

Kowloon
Hong Kong
Hong Kong

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