Optimal Queue Design

64 Pages Posted: 28 Jan 2021

See all articles by Yeon-Koo Che

Yeon-Koo Che

Columbia University

Olivier Tercieux

Paris-Jourdan Sciences Economiques (PSE)

Date Written: December 6, 2020

Abstract

We study the optimal design of a queueing system when agents' arrival and servicing are governed by a general Markov process. The designer of the system chooses entry and exit rules for agents, their service priority---or queueing discipline---as well as their information, while ensuring that agents have incentives to follow the designer's recommendations not only to join the queue but more importantly to stay in the queue. The optimal mechanism has a cutoff structure----agents are induced to enter up to a certain queue length and no agents are to exit the queue once they enter the queue; the agents on the queue are served according to a first-come-first-served (FCFS) rule; and they are given no information throughout the process beyond the recommendations they receive from the designer. FCFS is also necessary for optimality in a rich domain. We identify a novel role for queueing disciplines in regulating agents' beliefs, and their dynamic incentives, revealing a hitherto unrecognized virtue of FCFS in this regard.

Keywords: Queueing disciplines, information design, mechanism design, dynamic matching

JEL Classification: C78, C61, D47, D83, D61

Suggested Citation

Che, Yeon-Koo and Tercieux, Olivier, Optimal Queue Design (December 6, 2020). Available at SSRN: https://ssrn.com/abstract=3743663 or http://dx.doi.org/10.2139/ssrn.3743663

Yeon-Koo Che

Columbia University ( email )

420 W. 118th Street
New York, NY 10027

Olivier Tercieux (Contact Author)

Paris-Jourdan Sciences Economiques (PSE) ( email )

48, BD Jourdan
75014 Paris
France

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