Pooling Queues with Strategic Servers: The Effects of Customer Ownership

56 Pages Posted: 15 Apr 2017 Last revised: 14 Dec 2018

See all articles by Mor Armony

Mor Armony

New York University (NYU) - Department of Information, Operations, and Management Sciences

Guillaume Roels

INSEAD - Technology and Operations Management; University of California, Los Angeles (UCLA) - Decisions, Operations, and Technology Management (DOTM) Area

Hummy Song

The Wharton School, University of Pennsylvania - Operations, Information and Decisions Department

Date Written: April 12, 2017

Abstract

Contrary to traditional queueing theory, recent empirical studies in health care and call centers indicate that pooling queues may not lead to operational efficiencies relative to dedicated queues. In this paper, we argue that this phenomenon may arise when servers are strategic and exhibit customer ownership. Specifically, we consider two scopes of customer ownership: either limited to the point of service, in which case servers internalize the holding cost of only their customers in service; or extending to the whole system, in which case they internalize the holding costs of their customers in service and those in queue. We model the servers' choice of capacity as a non-cooperative game and show that servers in a pooled queueing system choose a lower capacity in equilibrium than in a dedicated queueing system, and that most potential benefits of pooling are hence lost, especially when servers have high discretion over their choice of capacity or when their cost of capacity is so high that the system operates at high utilization. Based on our analysis, we infer that the significant benefits of a dedicated configuration reported in practice most likely arise when servers are strategic, they operate at high utilization, and switching to a dedicated queueing system is accompanied by an expansion of their scope of customer ownership. This indicates that operational design can affect organizational culture.

Keywords: Queueing Theory, Game Theory, Behavioral Operations Management, Server Pooling, Customer Ownership

Suggested Citation

Armony, Mor and Roels, Guillaume and Song, Hummy, Pooling Queues with Strategic Servers: The Effects of Customer Ownership (April 12, 2017). Available at SSRN: https://ssrn.com/abstract=2951959 or http://dx.doi.org/10.2139/ssrn.2951959

Mor Armony

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States
(212) 998-0291 (Phone)
(212) 995-4227 (Fax)

Guillaume Roels

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France

University of California, Los Angeles (UCLA) - Decisions, Operations, and Technology Management (DOTM) Area ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Hummy Song (Contact Author)

The Wharton School, University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
560 Jon M. Huntsman Hall
Philadelphia, PA 19104
United States

HOME PAGE: http://https://oid.wharton.upenn.edu/profile/hummy/

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