Pricing schemes for congestion-prone service facilities

In this paper, we investigate the conditions under which a service facility should choose a fixed or a time-based pricing scheme under a queueing framework. We highlight the impact of the value-time relationship in the service process and the market size on the choice of pricing schemes. In particular, we show that the widely assumed fixed pricing scheme in the queueing-based pricing literature tends to be an ineffective one in a congestion-prone service system. (C) 2012 Elsevier B.V. All rights reserved.