Game-Theoretic Approach to Service Level Agreement for Resource Sharing

This study analyzes the situation when a capacitated facility is in need to use resource from another facility to serve its own customer. It can redirect the customer to another facility. The two facilities have an agreement to pay the other facility if this situation should arise. However, the referred facility holds the right to accept or decline the offer by another facility. Therefore. each facility sets a service level to serve referred customer. A bufferless queueing model is constructed to reflect the impatient customer. The model is analyzed using a game-theoretic approach. Finally, the Nash Equilibrium of the service level set by each facility is calculated.