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2151. Fair and efficient sharing: dynamic pricing control in batch service system with strategic customers

Invited abstract in session MC-40: Advances in Stochastic Modelling and Applied Probability II, stream Advances in Stochastic Modelling and Learning Methods.

Monday, 12:30-14:00
Room: 96 (building: 306)

Authors (first author is the speaker)

1. Ayane Nakamura
Department of Industrial and Systems Engineering, Keio University
2. Tuan Phung-Duc
University of Tsukuba

Abstract

Transportation systems, such as bus systems, are important areas in which to apply models for strategic customer behavior.
We then propose a dynamic pricing mechanism, in which the fees for each customer and the timing for the service commencement depend on their experienced time cost, for batch service (shuttle bus) systems, to achieve operational efficiency and passenger fairness under a strategic joining/balking scheme.
In this dynamic pricing scheme, the monopolist decides the fee for each customer such that all customers on the same shuttle have rigorously equivalent utilities (including waiting costs), and,
if the total time cost for waiting customers exceeds certain criteria, the monopolist lets the shuttle depart even though the number of customers is less than the full capacity.
For this model, we show an equilibrium strategy within certain parameters, and propose an algorithmic procedure that rigorously calculates the transition probability between states under long-term observation and construct a Markov chain for the number of waiting customers.
Based on the results, we present a method for calculating performance measures such as the mean of social welfare, monopolist revenue, and experienced utility.
Throughout some numerical experiments, we show that the dynamic pricing control has the potential to improve both fairness among customers and performance efficiency.

Keywords

Status: accepted

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