Follow the Crowd with Uncertain Service Capacity

Yang, Liu1; Shang, Wexin2; Liu, Limming3

2022-10-01

10.1287/msom.2022.1139

M&SOM-Manufacturing & Service Operations Management   Impact Factor & Quartile

1523-4614

1526-5498

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 signifi- cant 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.

follow the crowd uncertain service capacity observable queue inference effect

SCI ; SSCI

English

Others

National Natural Science Foundation of China["71991461","71532006"] ; Hong Kong Research Grants Council[LU 13502219]

Business & Economics ; Operations Research & Management Science

Management ; Operations Research & Management Science

WOS:000877048900001

INFORMS

Web of Science

1.Tsinghua Univ, Sch Econ & Management, Beijing 100084, Peoples R China
2.Lingnan Univ, Dept Comp & Decis Sci, Hong Kong 999077, Tuen Mun, Peoples R China
3.Southern Univ Sci & Technol, Sch Business, Shenzhen 518055, Peoples R China

Yang, Liu,Shang, Wexin,Liu, Limming. Follow the Crowd with Uncertain Service Capacity[J]. M&SOM-Manufacturing & Service Operations Management,2022.

Yang, Liu,Shang, Wexin,&Liu, Limming.(2022).Follow the Crowd with Uncertain Service Capacity.M&SOM-Manufacturing & Service Operations Management.

Yang, Liu,et al."Follow the Crowd with Uncertain Service Capacity".M&SOM-Manufacturing & Service Operations Management (2022).