This thesis investigates the strategic interactions between decision-makers under certain contexts. In the first essay, we consider a service provider’s optimal queue visibility policy when the customers do not know the random aggregate arrival rate and the realized arrival rate is the server’s private information. We assume that the server’s visibility decision itself signals its demand. The decision as a signal further shapes customers’ beliefs and affects their joining choices. Our main finding is a characterization of the server’s optimal policy under perfect Bayesian equilibrium. For a specific range of demand parameters, a server that faces a low demand rate and thus hides its queue length under complete information now chooses to reveal the queue length to differentiate itself f...[ Read more ]

This thesis investigates the strategic interactions between decision-makers under certain contexts. In the first essay, we consider a service provider’s optimal queue visibility policy when the customers do not know the random aggregate arrival rate and the realized arrival rate is the server’s private information. We assume that the server’s visibility decision itself signals its demand. The decision as a signal further shapes customers’ beliefs and affects their joining choices. Our main finding is a characterization of the server’s optimal policy under perfect Bayesian equilibrium. For a specific range of demand parameters, a server that faces a low demand rate and thus hides its queue length under complete information now chooses to reveal the queue length to differentiate itself from servers with a high demand rate, who are still better off hiding the queue length. In the second essay, we study how competitors in an asymmetric setting perform when the lagging competitor has the option to give up part of the outcome if she wins eventually by paying a fee ex-post to secure a ”fair” competition at the beginning. We show that both competitors’ equilibrium efforts decrease with the initial level of advantage, given that the lagging competitor insists on asymmetric competition. If the fee can be endogenously decided, there will always exist such negotiation price that makes the lagging competitor choose to pay the fee and join the fair competition, which implies that competitors decide to collaborate in an asymmetric contest if such opportunities are given.