Honesty is the Best Policy ... or is it? Demand Management for Probabilistic Service Options
To enable well-informed customer choices and redistribute demand across service options, providers can display probabilities regarding predicted service levels at the time of booking, effectively offering probabilistic service options. In many service settings, the underlying truthful probabilities endogenously depend on the system state, rather than being static product attributes controlled by the provider. While customers rely on this information when making decisions, they cannot readily verify its accuracy. Consequently, providers may be tempted to manipulate the displayed probabilities to guide customers' choices in their favor, creating a novel lever for demand management. In this ...
| Authors | Daniela Sailer, Robert Klein, Claudius Steinhardt |
|---|---|
| Primary category | cs.LG |
| Published | 15 October 2026 |
| Last updated at source | 15 October 2026 |
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