Advance reservation games
Date
2017-04-06
DOI
Authors
Simhon, Eran
Starobinski, David
Version
Accepted manuscript
OA Version
Citation
Eran Simhon, David Starobinski. 2017. "Advance Reservation Games." ACM Transactions on Modeling and Performance Evaluation of Computing Systems, v. 2, issue 2, pp. 1 - 21.
Abstract
Advance reservation (AR) services form a pillar of several branches of the economy, including transportation,
lodging, dining, and, more recently, cloud computing. In this work, we use game theory to analyze a slotted
AR system in which customers differ in their lead times. For each given time slot, the number of customers
requesting service is a random variable following a general probability distribution. Based on statistical
information, the customers decide whether or not to make an advance reservation of server resources in
future slots for a fee. We prove that only two types of equilibria are possible: either none of the customers
makes AR or only customers with lead time greater than some threshold make AR. Our analysis further
shows that the fee that maximizes the provider’s profit may lead to other equilibria, one of which yields zero
profit. In order to prevent ending up with no profit, the provider can elect to advertise a lower fee yielding
a guaranteed but smaller profit. We refer to the ratio of the maximum possible profit to the maximum
guaranteed profit as the price of conservatism. When the number of customers is a Poisson random variable, we prove that the price of conservatism is one in the single-server case, but can be arbitrarily high in a many-server system.