ISEM Seminar Series
“Naor Revisited: Matching Queues with Strategic Agents"by Dr Saif Benjaafar Seth Bonder Collegiate Professor, Professor Department of Industrial and Operations Engineering and Electrical Engineering and Computer Science, University of Michigan |
| 11 August 2026 (Tuesday), 10am – 11.30am Venue: E4 Cube |
| ABSTRACT
We study a two-sided queue in which strategic agents arrive continuously over time on each side and decide whether to join by comparing their matching reward with the expected delay cost until matching. Unlike single-sided queues, where self-interested agents unambiguously overjoin (Naor 1969), entry in a two-sided queue generates two opposing externalities: a negative delay externality on the same side and a positive matching externality on the opposite side through market thickening. We show that, as a result, equilibrium participation may exhibit either overjoining or underjoining relative to the social optimum. We characterize equilibrium and welfare-maximizing joining thresholds and quantify the resulting price of anarchy. The welfare-maximizing solution can be achieved via prices (possibly negative on one side and positive on the other) while generating positive revenue. Interestingly, maximizing total welfare need not increase welfare on both sides; one side’s welfare may decline if offset by sufficiently large gains on the other side. Under profit maximization, a platform may optimally extract all surplus from one side. Despite these distortions, the welfare gap between profit maximization and social welfare maximization is bounded. Both a social planner and a profit-maximizing platform internalize cross-side and congestion externalities when setting prices. |
| Saif Benjaafar is the Goff Smith Co-Director of the Tauber Institute for Global Operations, a joint institute of the Ross School of Business and the College of Engineering, at the University of Michigan, where he is also the Seth Bonder Collegiate Professor of Industrial and Operations Engineering and Professor of Electrical Engineering and Computer Science. Prior to joining the University of Michigan, he was McKnight Presidential Endowed Professor and Distinguished McKnight University Professor at the University of Minnesota, where he led the effort to establish the Department of Industrial & Systems Engineering. He is a founding member of the Singapore University of Technology and Design and served as Pillar Head (at the rank of Dean) of Engineering Systems and Design. He has broad research interests in operations management (supply chains, service systems, and markets), with current research at the intersection of innovative business models and technology, including platforms, sharing economy, on-demand services, and autonomy. He is a Fellow of INFORMS, MSOM, and IISE and a former Editor-in-Chief of the INFORMS journal Service Science. |