Pricing strategies of differentiated services in a single server system

Abstract

We consider a single server sharing system with two classes of services: premium and regular services. Two services are scheduled by a random polling way. Customer heterogeneity and delay sensitivity are both taken into account. We first proved that the polling system is equivalent to two service rate-dependent dedicated systems. Then we further analyze the optimal pricing strategies for respectively profit-maximization and welfare-maximization, and find that strategies for welfare-maximization can lead to higher facility utilization and a wider range that two differentiated services coexist.