Modeling Customers Choice Behavior in a Competitive Service Supply Chain

This paper studies customer´s behavior in choosing services in a competitive service supply chain characterized by service congestion phenomena. Heterogenous customers choose services based on the utility maximization principle taking congestion into account. We use customer choice theory and infinite dimensional variational inequality to model the customer behavior and estimate service market share. We give the existence condition for the equilibrium solution. An extended Frank and Wolfe algorithm for solving this market share problem and a numerical example is given at the end of the paper.