A Model of Queue Scalping

2021 ◽  
Author(s):  
Luyi Yang ◽  
Zhongbin Wang ◽  
Shiliang Cui
Keyword(s):  
Social Welfare ◽  
Service Provider ◽  
Operations Management ◽  
Consumer Surplus ◽  
System Throughput ◽  
Theoretic Model ◽  
Material Interest ◽  
Long Run ◽  
Short Run ◽  
Primary Service

Recent years have witnessed the rise of queue scalping in congestion-prone service systems. A queue scalper has no material interest in the primary service but proactively enters the queue in hopes of selling his spot later. This paper develops a queueing-game-theoretic model of queue scalping and generates the following insights. First, we find that queues with either a very small or very large demand volume may be immune to scalping, whereas queues with a nonextreme demand volume may attract the most scalpers. Second, in the short run, when capacity is fixed, the presence of queue scalping often increases social welfare and can increase or reduce system throughput, but it tends to reduce consumer surplus. Third, in the long run, the presence of queue scalping motivates a welfare-maximizing service provider to adjust capacity using a “pull-to-center” rule, increasing (respectively, reducing) capacity if the original capacity level is low (respectively, high). When the service provider responds by expanding capacity, the presence of queue scalping can increase social welfare, system throughput, and even consumer surplus in the long run, reversing its short-run detrimental effect on customers. Despite these potential benefits, such capacity expansion does little to mitigate scalping and may only generate more scalpers in the queue. Finally, we compare and contrast queue scalping with other common mechanisms in practice—namely, (centralized) pay-for-priority, line sitting, and callbacks. This paper was accepted by Victor Martínez de Albéniz, operations management.

Pooled vs. Dedicated Queues when Customers Are Delay-Sensitive

2021 ◽  
Author(s):  
Nur Sunar ◽  
Yichen Tu ◽  
Serhan Ziya
Keyword(s):  
Social Welfare ◽  
Operations Management ◽  
Sojourn Time ◽  
Consumer Surplus ◽  
Arrival Rate ◽  
System Size ◽  
Service Rate ◽  
Performance Loss ◽  
Delay Sensitive ◽  
Long Run

It is generally accepted that operating with a combined (i.e., pooled) queue rather than separate (i.e., dedicated) queues is beneficial because pooling queues reduces long-run average sojourn time. In fact, this is a well-established result in the literature when jobs cannot make decisions and servers and jobs are identical. An important corollary of this finding is that pooling queues improves social welfare in the aforementioned setting. We consider an observable multiserver queueing system that can be operated with either dedicated queues or a pooled one. Customers are delay-sensitive, and they decide to join or balk based on queue length information upon arrival; they are not subject to an external admission control. In this setting, we prove that, contrary to the common understanding, pooling queues can increase the long-run average sojourn time so much that the pooled system results in strictly smaller social welfare (and strictly smaller consumer surplus) than the dedicated system under certain conditions. Specifically, pooling queues hurts performance when the arrival-rate-to-service-rate ratio is large (e.g., greater than one) and the normalized service benefit is also large. We prove that the performance loss due to pooling queues can be significant. Our numerical studies demonstrate that pooling queues can decrease the social welfare (and consumer surplus) by more than 95%. The benefit of pooling is commonly believed to increase with system size. In contrast, we show that when delay-sensitive customers make rational joining decisions, the magnitude of the performance loss due to pooling can strictly increase with the system size. This paper was accepted by Terry Taylor, operations management.

scholarly journals ENDOGENOUSLY SEGMENTED ASSET MARKET IN AN INVENTORY-THEORETIC MODEL OF MONEY DEMAND

2012 ◽  
Vol 18 (2) ◽  
pp. 438-472 ◽  
Author(s):  
Jonathan Chiu
Keyword(s):  
Interest Rates ◽  
Money Demand ◽  
Asset Market ◽  
Fixed Cost ◽  
Theoretic Model ◽  
Long Run ◽  
Nominal Interest Rates ◽  
Goods Market ◽  
Short Run ◽  
Money Transfers

This paper studies the effects of monetary policy in an inventory-theoretic model of money demand. In this model, agents keep inventories of money, despite the fact that money is dominated in rate of return by interest-bearing assets, because they must pay a fixed cost to transfer funds between the asset market and the goods market. In contrast to exogenous segmentation models in the literature, the timing of money transfers is endogenous. As a result, the model endogenizes the degree of market segmentation as well as the magnitudes of liquidity effects, price sluggishness, and the variability of velocity. I first show that the endogenous segmentation model can generate the positive long-run relationship between money growth and velocity observed in the data, which the exogenous segmentation model fails to capture. I also show that the short-run effects of money shocks on prices, inflation, and nominal interest rates are not robust.

scholarly journals The Relationship between Government Debt and Social Welfare

2021 ◽  
Vol 19 (1) ◽  
pp. 125-134
Author(s):  
Muhammad Kivlan Reftreka Nugraha ◽  
Hefrizal Handra
Keyword(s):  
Social Welfare ◽  
Negative Correlation ◽  
Government Debt ◽  
Poverty Rate ◽  
Gdp Per Capita ◽  
Poverty Level ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
The Relationship

This study aims to analyze the relationship between government debt and social welfare in Indonesia in 1980-2019. The data used in this research is secondary data using time series data. The analysis used is the Error Correction Model (ECM). The findings result from the first model show that in the short-run, additional debt-to-GDP was not significant to the poverty level and GDP per capita. Meanwhile, the long-run, additional debt-to-GDP is significant to the poverty level and GDP per capita. The results also find that in the long run additional debt-to-GDP is positively correlated with poverty levels in Indonesia, meaning that additional debt-to-GDP increases the poverty rate in Indonesia. For GDP per capita, additional debt-to-GDP has a negative correlation. The inflation, tax-to-GDP, and GDP are not significant to the poverty rate in the short-run. Meanwhile, the long run, the additional debt-to-GDP ratio and GDP variable is significant to the poverty rate, and has a positif and negative correlation. The findings from second model also indicate that population and inflation are significant and positively correlated with the poverty level, but tax-to-GDP ratio is not significant on GDP per capita in the short-run. Meanwhile, the long run, the population and tax-to-GDP are significant to GDP per capita. Total population has a positive correlation, while tax-to-GDP ratio has a negative correlation.

scholarly journals Pengaruh globalisasi terhadap ketahanan pangan nasional

Agro Ekonomi ◽  
2016 ◽  
Vol 10 (1) ◽  
pp. 1
Author(s):  
Sri Widodo
Keyword(s):  
International Trade ◽  
Food Security ◽  
Social Welfare ◽  
Trade Policy ◽  
Consumer Surplus ◽  
Price Policy ◽  
Domestic Price ◽  
International Trade Policy ◽  
Long Run ◽  
The Impact

The problem on food security in Indonesia began to be interested since the economic crisis as one component of the social security net. Sustainable food security covers: availability of food, accessibility, utilization, stability, self reliance (autonomy) and sustainability. . Hirarchically food security can be at global order, regional, national, local, household and individual. The higher order offbod security is a necessary condition but not sufficient condition for the lower order.Economic theory indicate that there are gains to be made from free trade. increase the efficiency ufresource allocation, and increase welfare of all countries. However, all government, without exception, intervene to varying degrees in the working of natural market prces, with the reason the need to protect infant industry, to ensure food security, to redistribute income, and to enhance income of small producers.The liberalization initiatives culminated in UR agreement and WTO, among others, dismantling of quantitative restriction and subsidies as well as other nontariff barriers, but there were several new thing of antidumping tariff, sanitary and phytosanitary, technical barrier to trade,environment, and genetically modified organism.The impact of trade liberalization on exporter countries, in general, would benefit the producers, decrease the consumer surplus, and increase social welfare except large populated as India and China. The impact of importer countries depend on the policy of each country. Malaysia and Indonesia by decreasing import tariff policy would increase consumer surplus and social welfare but sacrificing the producers/farmers.National food policies consist of international trade policy domestic price policy, and policy on production efficiency. The international trade policy means to protect producers, consumers, and social welfare from the uncertainty of international market especially in the long run. The stabilization of domestic price policy needs inter department coordination and STE to implement. Protection could result inefficiency but it is needed for commodities those are not ready to compete and to protect from unfair trade, to protect farmers and long run food security.

Welfare Economic Principles of (Urban) Rail Network Pricing

2016 ◽  
pp. 161-171
Author(s):  
Jörg Schimmelpfennig
Keyword(s):  
Consumer Surplus ◽  
Welfare Economic ◽  
Railway Network ◽  
Rail Network ◽  
Marginal Costs ◽  
Long Run ◽  
Pricing Rules ◽  
Urban Rail ◽  
Short Run ◽  
Definition Of

The purpose of this chapter is to rectify the at best unprofessional intermingling of objectives and constraints and present a proper theory of first-best and second-best pricing in urban rail networks. First, in view of the flaws of both Dupuit's – though nevertheless ingenious idea of – consumer surplus as well its cannibalized version found in most of today's economics textbooks, a proper definition of economic welfare resting on Hicks'sian variations instead is provided. It is used to derive efficient pricing rules that are subsequently applied to specific questions arising from running an urban railway network such as overcrowding, short-run versus long-run capacity or competing modes of transport like the private motor car. At the same time, another look is taken at economic costs, and in particular economic marginal costs, differing from commercial or accounting costs. Among other things, it is shown that even with commercial marginal costs being constant first-best pricing might not necessarily be incompatible with a zero-profit budget.

Information Transparency Hypothesis

2011 ◽  
pp. 15-42 ◽  
Author(s):  
Kevin Zhu
Keyword(s):  
Social Welfare ◽  
Consumer Surplus ◽  
Electronic Markets ◽  
Theoretic Model ◽  
Electronic Market ◽  
Information Transparency ◽  
The Social ◽  
B2b Exchanges ◽  
Game Theoretic ◽  
Business To Business

This chapter explores the private and social desirability of information transparency of a business-to-business (B2B) electronic market that provides an online platform for information transmission. The abundance of transaction data available on the Internet tends to make information more transparent in B2B electronic markets. In such a transparent environment, it becomes easier for firms to obtain information that may allow them to infer their rivals’ costs than in a traditional, opaque market. How then does this benefit firms participating in the B2B exchanges? To what extent does information transparency affect consumers and the social welfare in a broader sense? Focusing on the informational effects, this study explores firms’ incentives to join a B2B exchange by developing a game-theoretic model under asymmetric information. We then examine its effect on expected profits, consumer surplus, and social welfare. Our results challenge the “information transparency hypothesis” (that is, open sharing of information in electronic markets is beneficial to all participating firms). In contrast to the popular belief, we show that information transparency could be a double-edged sword. Although its overall effect on social welfare is positive, its private desirability is deeply divided between producers and consumers, and even among producers themselves.

Privatization, Unemployment, and Welfare in the Harris-Todaro Model with a Mixed Duopoly

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
Jiancai Pi ◽  
Jun Yin
Keyword(s):  
Social Welfare ◽  
Market Share ◽  
Unemployment Rate ◽  
Relative Degree ◽  
Mixed Duopoly ◽  
Partial Privatization ◽  
The Public ◽  
Long Run ◽  
Public Firm ◽  
Short Run

Abstract This paper explores the unemployment and welfare effects of privatization through the Harris-Todaro model with a mixed duopoly. Our approach is more generalized than the existing literature. When capital is sector-specific (i. e., it is in the short run), an increase in the degree of partial privatization will raise the unemployment rate, but the change of social welfare is conditional on the market share of the public firm and the relative degree of partial privatization. When capital is sector-mobile (i. e., it is in the long run), an increase in the degree of partial privatization will reduce the unemployment rate, but the change of social welfare is also dependent on the market share of the public firm and the relative degree of partial privatization. Our results capture the fact that the public firm and the private firm usually coexist in a competitive environment in the real world.

Fiscal Constraints and Electoral Manipulation in American Social Welfare

1994 ◽  
Vol 88 (1) ◽  
pp. 77-94 ◽  
Author(s):  
Walter R. Mebane
Keyword(s):  
Social Welfare ◽  
Social Insurance ◽  
Multivariate Time Series ◽  
Generalized Method Of Moments ◽  
Equilibrium Constraints ◽  
Time Series Regression ◽  
Payroll Tax ◽  
Fiscal Constraints ◽  
Long Run ◽  
Short Run

American social welfare policy involves a politically significant fiscal interaction between short-run, pay-as-you-go constraints and long-run equilibrium constraints motivated by the contributory principle and the concept of actuarial soundness. The fiscal constraints induce conflict between benefit recipients and payroll-tax-payers. To support small election-year reductions in payroll taxes, means-tested program benefits are slightly reduced in election years (compared to non-election-year levels under similar economic conditions). The existence of the constraints and of the election-year changes is tested using a multivariate time series regression model of monthly transfer payments and contributions for social insurance during years 1948–87. Short-run dynamics are found to be weakly incrementalist, but otherwise the results support the argument. Extraordinary manipulations are identified during 1972. Special technical features of the econometric analysis are a nonlinear, dynamic specification; robust generalized method of moments estimation; and near cointegration.

scholarly journals Understanding International Prices: Customers as Capital

2012 ◽  
Vol 102 (1) ◽  
pp. 364-395 ◽  
Author(s):  
Lukasz A Drozd ◽  
Jaromir B Nosal
Keyword(s):  
International Macroeconomics ◽  
Theoretic Model ◽  
Key Innovation ◽  
Long Run ◽  
Market Shares ◽  
International Prices ◽  
Building Market ◽  
Short Run ◽  
Market Driven ◽  
Using Data

The article develops a new theory of pricing to market driven by dynamic frictions of building market shares. Our key innovation is a capital theoretic model of marketing in which relations with customers are valuable. We discipline the introduced friction using data on differences between short-run and long-run price elasticity of international trade flows. We show that the model accounts for several pricing “puzzles” of international macroeconomics. (JEL E13, F14, F31, F41, F44, M31)

Class Actions, Compliance and Moral Cost

2011 ◽  
Vol 7 (2) ◽  
Author(s):  
Bruno Deffains ◽  
Dominique Demougin
Keyword(s):  
Consumer Surplus ◽  
Class Action ◽  
Competitive Environment ◽  
Care Level ◽  
Class Actions ◽  
Long Run ◽  
Short Run ◽  
Moral Cost ◽  
Efficient Care ◽  
Action Procedure

We study the effects of introducing class action lawsuits into a competitive environment where some firms have an intrinsic motivation to implement efficient care. The standard aggregation argument in favor of class action holds that there will be increasing efficiency due to lower litigation costs. In the short run, intrinsically motivated firms benefit from the introduction of a class action procedure. In the long run, new intrinsically motivated entrants are attracted into the market, thereby increasing consumer surplus. Overall, the average care level increases.

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