Asymptotic Analysis of Service Systems with Congestion-Sensitive Customers

Many systems in services, manufacturing, and technology, feature users or customers sharing a limited number of resources, and which suffer some form of congestion when the number of users exceeds the number of resources. In such settings, queueing models are a common tool for describing the dynamics of the system and quantifying the congestion that results from the aggregated effects of individuals joining and leaving the system. Additionally, the customers themselves may be sensitive to congestion and react to the performance of the system, creating feedback and interaction between individual customer behavior and aggregate system dynamics.This dissertation focuses on the modeling and performance of service systems with congestion-sensitive customers using large-scale asymptotic analyses of queueing models. This work extends the theoretical literature on congestion-sensitive customers in queues in the settings of service differentiation and observational learning and abandonment. Chapter 2 considers the problem of a service provider facing a heterogeneous market of customers who differ based on their value for service and delay sensitivity. The service provider seeks to find the revenue maximizing level of service differentiation (offering different price-delay combinations). We show that the optimal policy places the system in heavy traffic, but at substantially different levels of congestion depending on the degree of service differentiation. Moreover, in a differentiated offering, the level of congestion will vary substantially between service classes. Chapter 3 presents a new model of customer abandonment in which congestion-sensitive customers observe the queue length, but do not know the service rate. Instead, they join the queue and observe their progress in order to estimate their wait times and make abandonment decisions. We show that an overloaded queue with observational learning and abandonment stabilizes at a queue length whose scale depends on the tail of the service time distribution. Methodologically, our asymptotic approach leverages stochastic limit theory to provide simple and intuitive results for optimizing or characterizing system performance. In particular, we use the analysis of deterministic fluid-type queues to provide a first-order characterization of the stochastic system dynamics, which is demonstrated by the convergence of the stochastic system to the fluid model. This also allows us to crisply illustrate and quantify the relative contributions of system or customer characteristics to overall system performance.