Cued to Queue: Information in Waiting-Line Auctions

2025-02-26

AI Summary

This paper investigates how public announcements—particularly “sudden bad news,” such as an unexpected upward revision of queue length—affect strategic entry timing decisions of agents and aggregate social surplus prior to time-based rationing of scarce goods. Adopting an integrated framework from queueing economics and mechanism design, it models waiting as a descending-price auction and analyzes equilibrium behavior via Bayesian Nash equilibrium under incomplete information. The study establishes that “bad news” can trigger collective early arrivals, leading to inefficient rationing misallocation. It further demonstrates that the efficacy of information policy hinges critically on the monotonicity of the value distribution’s hazard rate: under decreasing hazard rate, announcing only upon queue saturation maximizes total surplus; moreover, information interventions exert a non-monotonic effect on social surplus. These findings provide actionable theoretical foundations for designing optimal announcement policies in public service queuing systems.

Technology Category

• Game Theory and Economic Paradigms: Imperfect Information
• Multiagent Systems: Mechanism Design
• Planning, Routing, and Scheduling: Scheduling under Uncertainty

Application Category

• Economics, Online Markets and Human Computation: The sharing economy
• Security and Privacy: Large-scale security measurements
• Web Mining and Content Analysis: Content-based information diffusion

Abstract

We study the effect of providing information to agents who queue before a scarce good is distributed at a fixed time. When agents have quasi-linear utility in time spent waiting, they choose entry times as they would bids in a descending auction. An information designer can influence their behavior by providing updates about the length of the queue. Many natural information policies release"sudden bad news,"which occurs when agents learn that the queue is longer than previously believed. We show that sudden bad news can cause assortative inefficiency by prompting a mass of agents to simultaneously attempt to join the queue. As a result, if the value distribution has an increasing (decreasing) hazard rate, information policies that release sudden bad news increase (decrease) total surplus, relative to releasing no information. When agents face entry costs to join the queue and the value distribution has a decreasing hazard rate, an information designer maximizes total surplus by announcing only when the queue is full.

Problem

• Effect of information in queue auctions
• Impact of sudden bad news on queues
• Optimal information policies for surplus maximization

Innovation

• Queue length updates
• Sudden bad news effects
• Full queue announcements