Strategic Heterogeneous Customers in a Transportation Station: Information and Pricing

dc.authorid Canbolat, Pelin Gulsah/0000-0003-0028-3285
dc.authorid Manou, Athanasia/0000-0003-0934-5083
dc.authorid Karaesmen, Fikri/0000-0003-3851-6232
dc.authorscopusid 54400446000
dc.authorscopusid 54949950000
dc.authorscopusid 6602761461
dc.authorwosid Canbolat, Pelin Gulsah/M-4935-2016
dc.contributor.author Canbolat, Pelin Gülşah
dc.contributor.author Canbolat, Pelin G.
dc.contributor.author Karaesmen, Fikri
dc.contributor.other Industrial Engineering
dc.date.accessioned 2024-06-23T21:38:26Z
dc.date.available 2024-06-23T21:38:26Z
dc.date.issued 2024
dc.department Kadir Has University en_US
dc.department-temp [Manou, Athanasia] Natl & Kapodistrian Univ Athens, Dept Math, Athens 15784, Greece; [Canbolat, Pelin G.] Kadir Has Univ, Dept Ind Engn, TR-34083 Istanbul, Turkiye; [Karaesmen, Fikri] Koc Univ, Dept Ind Engn, TR-34450 Istanbul, Turkiye en_US
dc.description Canbolat, Pelin Gulsah/0000-0003-0028-3285; Manou, Athanasia/0000-0003-0934-5083; Karaesmen, Fikri/0000-0003-3851-6232 en_US
dc.description.abstract Problem definition: We consider pricing of services with strategic customers who have heterogeneous delay costs motivated by transportation systems. Customers are strategic decision makers who weigh the reward from the transport service against the waiting cost for the vehicle at a transportation station. Customers arrive at the station according to a Poisson process, and the vehicle visits the station according to a renewal process. We analyze the optimal price and the equilibrium for different levels of information available to customers. Methodology/results: We represent the service system as a stochastic clearing process, heterogeneity in delay cost as a random variable, and heterogeneity in rewards as a positive affine transformation of delay cost. For each information level, we identify the equilibrium behavior of customers and solve the revenue-maximization problem based on this equilibrium. The equilibrium turns out to be unique in each case, and it is of a threshold form in the sense that for each value of the information, it is best to join either for all types of customers, only for those who are sufficiently price sensitive, only for those who are sufficiently delay sensitive, or for none. The optimal fee is also unique in nontrivial cases. This enables us to perform comparisons across different information structures. Managerial implications: The effect of heterogeneity depends highly on model parameters as well as the available information. For a fixed fee, an increase in heterogeneity has a positive overall impact on the customer population, whereas the effect on the revenue can be positive (slow service at a high fee) or negative (fast service at a low fee). Unlike with fixed fee, for the optimal fee, an increase in heterogeneity can have a negative overall effect on customers. Ignoring heterogeneity can lead to a substantial opportunity loss for the system. en_US
dc.description.sponsorship AXA Research Fund; Marie Curie Career Integration Grant from the European Union [FP7-PEOPLE-2013-CIG, 618853] en_US
dc.description.sponsorship A. Manou was supported by AXA Research Fund. P. G. Canbolat was supported by Marie Curie Career Integration Grant from the European Union's Seventh Framework Programme (RISK) [FP7-PEOPLE-2013-CIG, Proposal No. 618853] . en_US
dc.identifier.citationcount 0
dc.identifier.doi 10.1287/msom.2021.0116
dc.identifier.issn 1523-4614
dc.identifier.issn 1526-5498
dc.identifier.issue 1 en_US
dc.identifier.scopus 2-s2.0-85183330730
dc.identifier.scopusquality Q1
dc.identifier.uri https://doi.org/10.1287/msom.2021.0116
dc.identifier.uri https://hdl.handle.net/20.500.12469/5799
dc.identifier.volume 26 en_US
dc.identifier.wos WOS:001084714300001
dc.identifier.wosquality Q1
dc.language.iso en en_US
dc.publisher informs en_US
dc.relation.publicationcategory Makale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı en_US
dc.rights info:eu-repo/semantics/openAccess en_US
dc.scopus.citedbyCount 0
dc.subject heterogeneous customers en_US
dc.subject strategic behavior en_US
dc.subject pricing en_US
dc.subject stochastic transportation system en_US
dc.subject delay information en_US
dc.title Strategic Heterogeneous Customers in a Transportation Station: Information and Pricing en_US
dc.type Article en_US
dc.wos.citedbyCount 0
dspace.entity.type Publication
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