The Social Cost of Growth: Evaluating GMV-Centric and Welfare-Centric Strategies in Online Food Delivery Platforms

• URL: http://arxiv.org/abs/2410.16566v1
• Date: Mon, 21 Oct 2024 22:55:59 GMT
• Title: The Social Cost of Growth: Evaluating GMV-Centric and Welfare-Centric Strategies in Online Food Delivery Platforms
• Authors: Yukun Zhang,
• Abstract summary: GMV strategies drive rapid short-term transaction growth but lead to uneven welfare distribution. Welfare-centric strategies promote a more balanced and equitable distribution of benefits among consumers, restaurants, and delivery workers.
• Score: 3.4039202831583903
• License:
• Abstract: This paper develops a comprehensive theoretical framework to analyze the trade-offs between Gross Merchandise Volume (GMV) maximization and social welfare optimization in online food delivery platforms. Using a multi-agent simulation and a dual-model approach based on two-sided market theory and welfare economics, we evaluate the impact of GMV-centric and welfare-centric strategies on platform dynamics, including pricing mechanisms, stakeholder welfare, and market efficiency. Our results show that GMV maximization strategies drive rapid short-term transaction growth but lead to uneven welfare distribution, particularly disadvantaging delivery workers. In contrast, welfare-centric strategies promote a more balanced and equitable distribution of benefits among consumers, restaurants, and delivery workers, enhancing platform sustainability in the long run. These findings provide actionable insights for platform operators and policymakers to design strategies that balance growth with social welfare, ensuring both economic efficiency and fairness.

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