Follow the Crowd with Uncertain Service Capacity

Liu YANG*, Weixin SHANG, Liming LIU

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

Abstract

Problem definition: Customer joining behavior is of major concern for service systems where the service capacity is uncertain.

Academic/practical relevance: It remains unclear whether customer inference of uncertain service capacity can lead to follow the crowd (FTC) behavior. Management can release capacity information, but how it affects system performance needs to be understood.

Methodology: We use a single-server queue to analyze the joining behavior of customers who infer the actual service capacity based on the queue length upon arrival. We also characterize the impact of capacity information disclosure both analytically and numerically.

Results: We find that when other customers’ tendency to join the service increases, a tagged customer can make more accurate inferences of service capacity based on queue length. This inference effect arises together with the congestion effect and can lead to FTC when it outweighs the latter. When multiple equilibria exist, we characterize the conditions under which the inference effect is significant at the aggregate customer level so that the joining equilibrium with a larger joining threshold is Pareto-optimal.

Managerial implications: Management needs to be careful in setting the information disclosure policy, as the key problem parameters may affect its impact on system throughput and social welfare in opposite directions.
Original languageEnglish
Number of pages12
JournalManufacturing & Service Operations Management
DOIs
Publication statusE-pub ahead of print - 22 Oct 2022

Bibliographical note

L. Yang was supported by the National Natural Science Foundation of China [Grants71991461 and 71532006]. W. Shang was supported by the Hong Kong Research Grants Council[GRF Project LU 13502219

Keywords

  • follow the crowd
  • uncertain service capacity
  • observable queue
  • inference effect

Fingerprint

Dive into the research topics of 'Follow the Crowd with Uncertain Service Capacity'. Together they form a unique fingerprint.

Cite this