In this paper we study the implications of service level guarantees (SLGs) in a model of oligopoly competition where providers compete to deliver a service to congestion-sensitive consumers. The SLG is a contractual obligation on the part of the service provider: regardless of how many customers...

In service industries with congestion effects, two very different contractual structures are commonly observed, depending on whether or not firms choose to offer a guaranteed service level. We analyze the impact of these choices on market outcomes in oligopolistic industries. Our results...

Two very different contractual structures are commonly observed in service industries with congestion effects: service level guarantees (SLGs) and best effort (BE) service. We analyze the impact of these contractual agreements on market outcomes in oligopolistic industries. First, we consider a...