THE POTENTIALLY NEGATIVE EFFECTS OF COOPERATION IN SERVICE SYSTEMS

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The 'Price of Anarchy' states that the performance of multi-agent service systems degrades with the agents' selfishness (anarchy). We investigate a service model in which both customers and the firm are strategic. We find that, for a Stackelberg game in which the server invests in capacity before customers decide whether or not to join, there can be a 'Benefit of Anarchy', that is, customers acting selfishly can have a greater overall utility than customers who are coordinated to maximize their overall utility. We also show that customer anarchy can be socially beneficial, resulting in a 'Social Benefit of Anarchy'. We show that such phenomena are rather general and can arise in multiple settings (e.g. in both profit-maximizing and welfare-maximizing firms, in both capacity-setting and price-setting firms, and in both observable and unobservable queues). However, the underlying mechanism leading to the Benefit of Anarchy can differ significantly from one setting to another.
Publisher
APPLIED PROBABILITY TRUST
Issue Date
2020-03
Language
English
Article Type
Article
Citation

ADVANCES IN APPLIED PROBABILITY, v.52, no.1, pp.319 - 347

ISSN
0001-8678
DOI
10.1017/apr.2019.64
URI
http://hdl.handle.net/10203/274246
Appears in Collection
MT-Journal Papers(저널논문)
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