讲座题目：Advance Selling and Upgrading in Priority Queue
We study advance selling and upgrading in a priority queue setting that emerges in the amusement park industry. Customers choose to buy the fast-track or regular tickets depending on their heterogeneous waiting costs. At the park entrance, customers can choose tickets based on the observed congestion levels. Advance tickets are cheaper, but customers suffer from congestion uncertainty. Upgrading options allow customers to purchase regular tickets in advance and upgrade on-site if the congestion turns out to be high. Our objective is to find the optimal pricing scheme to maximize revenue. We find that if all customers arrive in advance, in many cases advance-and-spot selling without upgrading achieves the upper bound—the optimal extra revenue from the state-dependent priority pricing, hence the upgrading option is not necessary. On the other hand, if some customers arrive on the spot, allowing upgrading is more likely to generate more revenue. In scenarios where upgrading increases the revenue, the upgrading options, despite offering consumers greater flexibility, hurt consumer surplus. When both online and offline customers exist, it could be more profitable to focus advance and upgrading prices on online customers and focus spot prices on offline customers.
Dongyuan Zhan is an Assistant Professor at UCL School of Management. He studies service operations, platform design with an emphasis on strategic behavior of servers or agents whose payoff may include behavioral concerns. For example, he studies compensation for call center representatives competing for calls when there is a speed quality tradeoff; he investigates information acquisition equilibrium in MOOC peer grading platforms when the students care about both fairness and social comparison; he demonstrates how lying aversion impacts the optimal schedule in a priority queue where customers may cheat for priority. His papers have won the Second Place of CSAMSE Best Paper Award, and won twice NET Institute Summer Research Grants. He is on the Editorial Review Board of POMS. He holds a Ph.D. degree from Marshall School of Business at University of Southern California, and an MS and a BS degree from Tsinghua University.