Fairness perceptions and payoff allocation preferences in the online food order and delivery industry: Evidence from a real experiment

Abstract

Amid concern about the welfare implications of the revenue share model between food service establishments (FSEs) and food delivery companies (FDCs), academic contributions have been mostly theoretical. Within a conceptual framework of fairness, our empirical study provides a perspective from the third party in the multi-sided market: the consumer. Following an incentivized payoff allocation experiment with 500 English food consumers, we make three observations: (1) participants prefer to make allocations to FSEs as opposed to FDCs, (2) participants who perceive fairness as a social construct (honesty, responsibility) derive the most disutility from advantageous inequality and the least disutility from disadvantageous inequality in relation to FSEs, and (3) participants who perceive fairness as a structural construct (processes, outcomes) prefer more equal payoff allocations to FSEs and FDCs. The perception of price unfairness in the online food order and delivery industry is apparent, speaking to the need to find market and policy solutions.