On Threshold Routing in a Service System with Highest-Bidder-First and FIFO Services

Abstract: In this paper, we consider a two server system serving heterogeneous customers. One of the server has a FIFO scheduling policy and charges a fixed admission price to each customer. The second queue follows the highest-bidder-first (HBF) policy where an arriving customer bids for its position in the queue. Customers make an individually optimal choice of the server and for such system, we characterize the equilibrium routing of customers. We specifically show that this routing is characterized by two thresholds.