Okenshields Lines and the Market Clearing Price Model
Source: https://cornellsun.com/2018/09/11/okenshields-implements-new-line-up-system-to-reduce-waiting-time/
Okenshields Lines and the Market Clearing Price Model
During class, we learned about how the market-clearing price model takes advantage of the fact that when making choices, people weigh their preferences in respect to other factors that would cost them different values depending on the preferred choice. This made me think of how this would apply to decisions I make in my everyday life. Lining up for food in dining halls came to mind; in particular, this idea reminded me of an article in the Daily Sun. The article describes a common problem that many students run into: long lines for food in the dining hall. Sun describes in the article what many people have already realized: the single-line model forces every single student to queue up for every food offering even if they only have one dish on their mind. To remedy this, an Okenshields manager began to implement a new system where the single main line of food would be broken up such that diners can choose which line they want to queue on depending on what food they want.
This method proved to be very successful in cutting down wait times and making customers happy. Why it worked can be explained in terms of the market-clearing price model. We can set up a matching market by creating an analogy with the “seller” or “good” nodes being the specific food offered on the line, the “buyer” nodes being the diner, the “valuations” being how much a diner wants a specific food, and the “prices” being the wait time. Using the traditional method of waiting on a single line, every buyer’s value (preference for a food) is disregarded as they are forced to wait on one line no matter the “cost” (wait time), which is usually annoyingly high. However, with the Okenshields model, values (level of preferences) and costs (wait times) are taken into account for a better experience.
For example, say I’m in the dining hall and I only have 30 minutes to eat. My preferred choices for food are in order from most preferred to least preferred as follows:
- Some tasty chicken on the hot dish line
- A yummy quinoa salad from the Greens & Grains station
- Some soggy stir fry from the Asian food station
On this day, let’s say everyone in the dining hall wants that tasty chicken. Because the chicken is in high demand, the line will grow hence increasing the wait time or “cost”. Now with the improved line system, I can now re-evaluate my choices based on these factors. Let’s say the line looks like it’ll take too long for me to wait on and comfortably eat within 30 minutes; with this in mind, my preference or “valuation” for the chicken now goes below my value for the quinoa salad which has a very short line. Using the improved line system, I can and will just get on the Greens & Grains line to get the food I want in a shorter amount of time, resulting in a better dining experience overall. Even though I didn’t exactly get my first choice of food, I definitely saved time which was enough of a benefit to avoid the cost of the chicken line.
