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On the uniqueness and stability of equilibrium in quality-speed competition with boundedly-rational customers: The case with general reward function and multiple servers
Xin Li1; Qingying Li2; Pengfei Guo3; Zhaotong Lian4
2017-11
Source PublicationINTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
ABS Journal Level3
ISSN0925-5273
Volume193Pages:726-736
Abstract

In this paper, we extend the service-speed competition game with boundedly rational customers considered in Li et al. (2016) to the case with general reward function and multiple servers. The N servers make strategic decisions on their service rates sequentially and repeatedly. Since the competing servers' payoff functions can only be expressed by an implicit-function set, we propose a matrix method to derive the uniqueness of the equilibrium service rates, and we establish the stability of the equilibrium through a tatônnement scheme. By conducting a sensitivity analysis regarding the number of competing servers and the demand density, we find that the server competition benefits the customers by improving their utilities as well as getting more customers to be served. Furthermore, for a fixed demand density, the equilibrium service rate increases in the market size and converges to a certain level when the market size is large enough.

KeywordBounded Rationality Customer-sensitive Service Matrix Strategic Queueing
DOI10.1016/j.ijpe.2017.08.026
URLView the original
Indexed BySCIE ; SSCI
Language英語English
WOS Research AreaEngineering ; Operations Research & Management Science
WOS SubjectEngineering, Industrial ; Engineering, Manufacturing ; Operations Research & Management Science
WOS IDWOS:000414814700060
PublisherELSEVIER SCIENCE BV, PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS
Scopus ID2-s2.0-85029175469
Fulltext Access
Citation statistics
Document TypeJournal article
CollectionDEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
University of Macau
Corresponding AuthorQingying Li
Affiliation1.Department of Decision Sciences,School of Business,Macau University of Science and Technology,,Macao
2.Glorious Sun School of Business and Management,Donghua University,,Shanghai,China
3.Faculty of Business,The Hong Kong Polytechnic University,,Hong Kong
4.Faculty of Business Administration,University of Macau,,Macao
First Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Xin Li,Qingying Li,Pengfei Guo,et al. On the uniqueness and stability of equilibrium in quality-speed competition with boundedly-rational customers: The case with general reward function and multiple servers[J]. INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, 2017, 193, 726-736.
APA Xin Li., Qingying Li., Pengfei Guo., & Zhaotong Lian (2017). On the uniqueness and stability of equilibrium in quality-speed competition with boundedly-rational customers: The case with general reward function and multiple servers. INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, 193, 726-736.
MLA Xin Li,et al."On the uniqueness and stability of equilibrium in quality-speed competition with boundedly-rational customers: The case with general reward function and multiple servers".INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS 193(2017):726-736.
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