91 Auctioning and Selling Positions: a noncooperative approach to queueing conflicts
- Yuan Ju, Youngsub Chun, René van den Brink
- no.91.pdf
Abstract
Complementary to the axiomatic and mechanism design studies on queueing problems,
this paper proposes a strategic bargaining approach to resolve queueing con
icts. Given
a situation where players with di erent waiting costs have to form a queue in order to be
served, they rstly compete with each other for a speci c position in the queue. Then, the
winner can decide to take up the position or sell it to the others. In the former case, the
rest of the players will proceed to compete for the remaining positions in the same manner;
whereas for the latter case the seller can propose a queue with corresponding payments to
the others which can be accepted or rejected. Depending on which position players are going
to compete for, the subgame perfect equilibrium outcome of the corresponding mechanism
coincides with one of the two best known rules for queueing problems, the maximal and
the minimal transfer rules, while an ecient queue is always formed in equilibrium. The
analysis discovers a striking relationship between pessimism and optimism in this type of
decision making.
Keywords: Queueing problem, minimal transfer rule, maximal transfer rule, Shapley value, bidding mechanism, implementation
JEL classification: C71; C72; D60