The Service Mechanism Design And Pricing Based On Customer Fairness Preferences

Due to customer heterogeneity(waiting time costs of customers are different),in order to improve the efficiency of queuing and customer satisfaction,enterprises usually adopt classification of services through setting priority according to the different waiting costs of customers.However,the classification of services causes the difference of waiting time between different queues,so that customers feel unfair psychologically(unfairness aversion and envy seeking).The paper selects the average waiting time of customers who enter a queuing system which is subject to the first-come-first-served rule,as the reference time to measure the fairness preferences of customers.Due to the difference between the average waiting time and the fair reference time,and the influences of customer fairness preferences,led to a certain psychological effects and customer flow or loss,and further affect the enterprise revenue and social welfare.Therefore,this paper studies the impact of customer fairness preferences on enterprise revenue and social welfare,and then determines the corresponding service mechanism and put forward the management insights.This paper studies from the two perspectives of enterprise revenue and social welfare,and considers two service situations that customer cannot leave(monopoly)service system and customers can leave(non-monopoly)service system,respectively.For the situation that customers cannot leave the service system,from the perspective of revenue maximization,enterprises should adopt classification of services and set the priority service window and regular service window at a relatively close distance.From the perspective of social welfare maximization,enterprises should adopt classification of services,while set the service windows at a far distance.For the situation that customers can leave,enterprises should reduce the stimulations for unfairness aversion to avoid customer abandonment.Then,study the influences of fairness preferences on revenue and social welfare by using numerical simulations.The results suggest that the change trend of optimal revenue with customer fairness preferences is influenced by the basic fee for customers getting service,irrespective of service rate.That means when the basic fee is smaller,if loss aversion preference is weaker,revenue would be decreased;while,if loss aversion preference is stronger,revenue would be increased.When the basic fee is mid-ranged,revenue decreases with loss aversion.When the basic fee is large enough,revenue is fixed.Besides,from the perspective of social welfare maximization,if service rate is limited,enterprises should adopt classification of services and set the service windows at a relatively far distance;if service rate is larger,enterprises should cancel classification of services.