The impact of delaying the delay announcements

Many service providers use delay announcements to inform customers of anticipated delays. However, this information is usually not provided immediately but after a short period of time (spent either waiting or occupied by the system). The focus of this paper is on the impact of this postponement on the ability of the firm to influence customer behavior by communicating nonverifiable congestion information to its customers, as well as on the profits and utilities for the firm and the customers, respectively. We show that this postponement can actually help the firm create credibility and augment the resulting equilibrium. However, in other settings this delay can also detract from the resulting equilibrium. Furthermore, we show that whenever credibility is created it improves not only the profit for the firm but also the customers' overall utility under certain settings. Subject classifications: Noncooperative game; queues; tandem queues; admission control; access control; real-time information; strategic consumer. Area of review: Manufacturing, Service, and Supply Chain Operations. History: Received December 2008; revisions received September 2009, March 2010, May 2010; accepted July 2010.