Disequilibrium theory, waiting costs, and saving behavior
in centrally planned economies:
A queuing-theoretic approach
by Barbara G. Katz and Joel Owen
Abstract
An expected-utility maximizer, obliged to make a single purchase from two alternatives, finds that a queue forms for the good that would have been selected had both goods been available. An M/M/1 queue is posited and for each period of delay the maximum additional payment b* that the consumer would incur to join the queue is determined. This has implications for saving. Not only the availability of the good, but also the delay in obtaining it, the alteration in its arrival rate, and the `stampede effect` determine saving behavior.