Revenue Management & Delay Tactics For Competing Service Providers In Time-Sensitive Markets With Private Information
- Topics:
- Revenue Forecasting
- Tags:
- Business Services,
- Finance,
- Firm,
- Northwestern University,
- Operational Accounting,
- Price-delay,
- Revenue,
- Revenue Management
- Source:
- Northwestern University
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Overview: How should competing firms design their price-scheduling mechanisms to maximize revenues from heterogeneous time-sensitive customers with private information about their value of service and delay tolerance? This question is considered for duopoly firms, modeled as queueing systems, which serve two customer types. Price-delay is studied equilibria in this setting, particularly the conditions for the emergence of strategic delay, whereby firms artificially delay the completed orders of low-priority customers. This paper shows that strategic delay may occur in equilibrium depending on two opposite effects that push firms to increase or decrease their price-delay differentiation: a competition effect which limits firms' incentives to artificially delay their low-priority customers, and a service differentiation effect that prompts firms to increase the difference between high and low-priority service.
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Format: PDF | Size: 106KB | Date: May 2005 | Pages: 5
