Consumer preferences for commission rates in the online food delivery industry
A willingness-to-pay approach
Bibliographic Data
| ID | 21296232 |
|---|---|
| Authors | Jasper Grashuis (0000-0002-5075-4439, University of Missouri), Ye SU (0000-0003-2071-6236, Lincoln University - Missouri), Pei Liu (0000-0001-5330-9640, University of Missouri) |
| Year | 2024 |
| Volume | 126 |
| Issue | 6 |
| Pages | 2548-2560 |
| Publication date | 2024-05-09 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | British Food Journal (JOURNAL) |
| Journal identifiers | ISSN: 0007-070X • E-ISSN: 1758-4108 |
| Publisher | Emerald (PUBLISHER) |
| DOI | 10.1108/bfj-09-2023-0847 |
| OpenAlex | W4394952336 |
| Language | EN |
| Citations received | 1 |
| References cited | 29 |
Purpose Food service establishments and online food delivery companies use a revenue share model based on a commission rate. Because of the asymmetry of bargaining power, many food service establishments are vulnerable to a high commission rate. What is missing in the ongoing discussion about the revenue share model is the perspective of food consumers, who are the third party in the multi-sided market. Design/methodology/approach Within a willingness-to-pay (WTP) framework, we study if food consumers have preferences for the commission rate charged by food delivery companies to food service establishments. With 456 random consumers in the United States, we conduct a controlled experiment in which information is used as treatment in two groups. In the first group, the provided information only relates to the revenue share model (i.e. economic). In the second group, participants also received information about price control initiatives (i.e. economic and political). Findings Based on WTP-space mixed logit model results, there is a significant effect of information on preferences for the commission rate. While participants in the control group exhibited no aversion to the commission rate, participants who received treatment had a significant and negative WTP. The magnitude of the effect is estimated at -$1.08 for participants in the first treatment and -$2.28 for participants in the second treatment. Originality/value To date there is no applied research on the preferences of consumers in the online food order and delivery industry with respect to upstream conditions (i.e. commission rates)
Advertising · Business · Commission · Economics · Food delivery · Food industry · Microeconomics · Willingness to pay · Consumer Market Behavior and Pricing · Consumer Retail Behavior Studies · Economic and Environmental Valuation · Food Science · Marketing
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| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2025 - 2025 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |