Switching Costs and the Gittins Index

Switching Costs and the Gittins Index

On the Gittins index in the M/G/1 queue

For an M/G/1 queue with the objective of minimizing the mean number of jobs in the system, the Gittins index rule is known to be optimal among the set of non-anticipating policies. We develop properties of the Gittins index. For a single-class queue it is known that when the service time distribution is of type Decreasing Hazard Rate (New Better than Used in Expectation), the Foreground-Backgro...

Properties of the Gittins Index with Application to Optimal Scheduling

We consider the optimal scheduling problem for a single-server queue without arrivals. We allow preemptions, and our purpose is to minimize the expected flow time. The optimal non-anticipating discipline is known to be the Gittins index policy, which, however, is defined in an implicit way. Until now, its general behaviour in this specific problem has been characterized only in a few special ca...

Information Technology and Switching Costs Information Technology and Switching Costs

Switching costs, the real or perceived cost of changing product providers, has become increasingly important in information-intensive businesses. Reduced search and transactions costs have made it possible for customers to more readily evaluate alternative suppliers, increasing switching. At the same time, the high fixed cost structure of customer acquisition and operations in information-inten...

Multi-Armed Bandits, Gittins Index, and its Calculation

Multi-armed bandit is a colorful term that refers to the di lemma faced by a gambler playing in a casino with multiple slot machines (which were colloquially called onearmed bandits). W h a t strategy should a gambler use to pick the machine to play next? It is the one for which the posterior mean of winning is the highest and thereby maximizes current expected reward, or the one for which the ...