Trading Places: An Experimental Comparison of Reallocation Mechanisms for Priority Queuing

17 Pages Posted: 28 May 2020

See all articles by Anouar El Haji

Anouar El Haji

University of Amsterdam; Amsterdam Business School

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: Winter 2019

Abstract

In a laboratory experiment, we compare two auction mechanisms that are designed to improve a queue's efficiency by allowing customers to trade places. In the server‐initiated auction, the server, when idle, sells the right to be served next to the highest bidding customer in the queue and distributes the proceeds among the remaining customers. In the customer‐initiated auction, new arrivals can sequentially trade places with queued customers. We use two novel experimental protocols to examine the behavioral properties of both auction mechanisms. We find that both auction mechanisms improve a queue's efficiency on average and that both perform equally well in terms of efficiency gain. We also find evidence of the sunk‐cost effect but not of the endowment effect. Participants indicated that they found the server‐initiated auction a fairer mechanism than the customer‐initiated auction. When voting between the two auctions, the participants tended to favor the server‐initiated auction.

Keywords: endowment effect, queuing, sunk‐cost effect

Suggested Citation

El Haji, Anouar and Onderstal, Sander, Trading Places: An Experimental Comparison of Reallocation Mechanisms for Priority Queuing (Winter 2019). Journal of Economics & Management Strategy, Vol. 28, Issue 4, pp. 670-686, 2019, Available at SSRN: https://ssrn.com/abstract=3607403 or http://dx.doi.org/10.1111/jems.12314

Anouar El Haji (Contact Author)

University of Amsterdam; Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

Sander Onderstal

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
56
PlumX Metrics