New Way To Improve Customer Service: Real-time Delay Announcements

Internet-based technology enables firms to disseminate real-time delay information to delay-sensitive customers. We study how such delay announcements impact service providers in a competitive environment with two service providers who compete for market share. We find that only the lower capacity service provider announces its real-time delay under intermediate system loads and highly imbalanced capacities. However, for most parameter settings, the mere presence of a competitor induces both providers to announce delays in equilibrium, leaving customers better off on average.