Incentive effects of common and separate queues with multiple servers: The principal-agent perspective

A two-server service network has been studied by Gilbert and Weng from the principal-agent perspective. In the model, services are rendered by two independent facilities coordinated by an agency. The agency must devise a strategy to allocate customers to the facilities and determine the compensation. A common queue allocation scheme and separate queue allocation scheme are then compared. It has been shown that the separate queue system gives more competition incentives to the independent facilities and induces a higher service capacity. The main aim of this paper is to extend the results of the two-server queueing model to the case of multiple-server queueing model. Our analysis shows that in the case of multiple servers the separate queue allocation scheme creates more competition incentives for servers to increase their service capacities. In particular, when there are not severe diseconomies associated with increasing service capacity, the separate queue allocation scheme gives a lower expected sojourn time in equilibrium.