Efficiency in Queuing Under Decentralized Mechanisms

We study, theoretically and in the laboratory, three simple decentralized mechanisms to reallocate positions in a queuing problem. In our environment, players have heterogeneous values for time and arrive in random order to a queue before service starts. While waiting for service, they can switch positions, with different rules depending on the mechanism in place. We mainly focus on three institutions: voluntary swapping upon request, take-it-or-leave-it (TIOLI) monetary offers, and a non-fungible reputation point system (“social token”). Compared to the initial order of the lines, we find modest efficiency gains when swapping and the social token are in place. In contrast, we find a sizable efficiency improvement in queues with monetary transfers. Although TIOLI improves efficiency, this gain comes at the cost of higher inequality. We also study these mechanisms with and without unilateral communication from the switch requester. This form of cheap talk has no impact on the main studied outcomes.

Keywords: Queuing, Decentralized mechanisms, TIOLI, Auction, Indirect Reciprocity.

JEL Classification: C92, D47, D82