Apostolos Burnetas is a Professor of Stochastic Operations Research at the Department of Mathematics of the National and Kapodistrian University of Athens. He has a Diploma in Electrical Engineering from the National Technical University, Greece and an MBA and PhD in Operations Management from the Graduate School of Management, Rutgers University, New Jersey, USA. He has served as an Assistant and Associate Professor of Operations Resesarch in the Department of Operations, Case Western Reserve University, Cleveland, USA. His teaching interests include Operations Research and Operations Management, Probability and Statistics, Supply Chain Management, Queueing, Game Theory, etc. He has taught a variety of courses in these areas in the undergraduate and graduate programs of the Department of Mathematics. In addition, he has taught graduate courses in Statistics, Operations Research and Management Science, Queueing Theory, etc. in other graduate programs of the University of Athens, the Athens University of Economics and Business, the Hellenic Military School and the Technical University of Crete. He is also a member of Collaborating Teaching Faculty of the Hellenic Open University. He has supervised or co-supervised 12 doctoral dissertations and about 50 master theses. Apostolos' research interest are in the area of Stochastic Modeling and Optimization, and include Adaptive Optimization and Multi-Armed Bandit Problems, Queueing Admission and Service Control, Service Systems with Strategic Customers, Contract Design and Coordination in Supply Chain Management. His research has been published in refereed international journals of Operations Research and Operations Management, and has received about 2200 citations (Google Scholar). He has also coordinated and/or participated in research grants in Queueing Theory and Optimization, Service Systems with Strategic Customers, Economics and Regulation, and Stochastic Optimization. He has organized an international conference in Stochastic Models and participated in the Scientific and Organizing Committees of several conferences in Operations Research, Applied Probability and Statistics etc.
Queues with Strategic Customers: Equilibrium, Social Welfare Optimization and Pricing
The strategic behavior of customers has long been recognized as an important dimension in the modeling and analysis of production and service systems in Operations Research. Customers are rational decision makers who react to pricing, product quality and availability etc., and decide whether, when and how much of the product to buy so that they maximize their own utility. Incorporating customer behavior effectively internalizes the demand function and potentially leads to more realistic models for pricing, production planning and control.
When the system under consideration provides a service that involves waiting and queueing, analyzing the strategic behavior of customers becomes substantially more involved, because a customer’s decision to join a queue affects the system congestion and the delay of the other customers as well, thus introducing externalities. Therefore, when customers are delay sensitive, their behavior affects and is affected by similar decisions of the other customers. Under this game-theoretic framework, the demand function emerges as an equilibrium strategy in appropriately defined games played between service providers and customers.
In this talk we will present some basic models from the area of queueing with strategic customer behavior. We will focus on the implications on pricing, both from a profit maximizing and a social welfare optimization perspective.