First Ranked First to Serve: Strategic Agents in a Service Contest

Posted: 30 Nov 2015

See all articles by Konstantinos I. Stouras

Konstantinos I. Stouras

University of Virginia - Darden School of Business

Karan Girotra

Cornell Tech; Cornell SC Johnson College of Business

Serguei Netessine

The Wharton School, University of Pennsylvania

Date Written: November 2015

Abstract

We model a service provider whose agents endogenously determine their participation and performance level. This paper is motivated by two-sided marketplaces and work-from-home call centers, which crowdsource incoming demand to a pool of agents. The agents are ranked in a prespecified number of priority classes based on their relative performance. Higher performers are more utilized and agents' idle time is not compensated. We study which priority class structure creates the best incentives for agents' participation and performance. We show that the optimal design of such a “service contest” is often coarse, namely, it contains only a few priority classes. Discarding available information on agents' relative rankings, or, deploying coarser priority classes, can paradoxically provide higher incentives for agents' participation and performance.

Keywords: work-from-home call centers, service contest, strategic servers, server priorities, service operations

Suggested Citation

Stouras, Konstantinos I. and Girotra, Karan and Netessine, Serguei, First Ranked First to Serve: Strategic Agents in a Service Contest (November 2015). Available at SSRN: https://ssrn.com/abstract=2696868 or http://dx.doi.org/10.2139/ssrn.2696868

Konstantinos I. Stouras (Contact Author)

University of Virginia - Darden School of Business ( email )

100 Darden Boulevard
Charlottesville, VA 22903
United States

HOME PAGE: http://www.stouras.com

Karan Girotra

Cornell Tech ( email )

111 8th Avenue #302
New York, NY 10011
United States

HOME PAGE: http://www.girotra.com

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

HOME PAGE: http://www.girotra.com

Serguei Netessine

The Wharton School, University of Pennsylvania ( email )

3730 Walnut Street
Philadelphia, PA 19104-6367
United States
(215) 573 3571 (Phone)

HOME PAGE: http://www.netessine.com

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