Pricing schemes for congestion-prone service facilities

In this paper, we investigate the conditions under which a service facility should choose a fixed or a time-based pricing scheme under a queueing framework. We highlight the impact of the value–time relationship in the service process and the market size on the choice of pricing schemes. In particular, we show that the widely assumed fixed pricing scheme in the queueing-based pricing literature tends to be an ineffective one in a congestion-prone service system.