Title: Social welfare optimisation in a Hotelling model with two double-sided queues

Authors: Ying Shi; Zhaotong Lian; Xin Li; Qingqi Long

Addresses: International Business School, Innovation Center for China-US Youth Exchange, Guangdong University of Finance and Economics, Guangdong, China ' Faculty of Business Administration, University of Macau, Macau ' Department of Decision Sciences, School of Business, Macau University of Science and Technology, Macau ' School of Information Management and Artificial Intelligence, Zhejiang University of Finance and Economics, Zhejiang, China

Abstract: We study the problem of the optimal number of taxis in a Hotelling queue model, with two taxi stations: one at each end of a linear market. Each station is modelled as a double-sided queue and an equilibrium location divides taxi drivers into two parts to join either station. We find that customer utility increases with the number of customers, but decreases with the buffers of stations, the unit transportation cost and unit waiting cost of taxi drivers. The profit of each taxi driver increases with the number of customers but decreases with the unit transportation cost. Interestingly, the profit of each taxi driver increases and then decreases with the unit waiting cost and the buffers of the stations.

Keywords: taxi; passenger; double-sided queue; welfare-maximisation; Hotelling queue model.

DOI: 10.1504/IJSTL.2024.137585

International Journal of Shipping and Transport Logistics, 2024 Vol.18 No.1, pp.46 - 62

Received: 13 May 2022
Accepted: 23 Aug 2022
Published online: 27 Mar 2024 *

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