Blind Queues: The Impact of Consumer Beliefs on Revenues and Congestion

In many service settings, consumers have to join the queue without being fully aware of the parameters of the service provider (for e.g., customers at check-out counters may not know the true service rate prior to joining). In such “blind queues”, consumers typically make their decisions based on the limited information about the service provider’s operational parameters (from past service experiences, reviews, etc.), and the current state of the queue (the queue length). We consider a firm that serves a consumer population that may have arbitrarily misinformed beliefs about the service parameters. We show while revealing the service information to consumers improves revenues under certain consumer beliefs, it may however destroy consumer welfare or social welfare. Given a market size, the consumer welfare can be significantly reduced when a fast server announces its true service parameter. We also show that learning the service rate through sampling in blind queues leads to optimistically biased but asymptotically consistent consumer beliefs.