The impact of capitalist profit-seeking behavior by online food delivery platforms on food safety risks and government regulation strategies

Abstract

AbstractCapital monopolized platforms that have emerged based on the new “Internet Plus” economic form will undoubtedly distort market competition. Taking the Meituan online food delivery platform in China as an example, this study (1) investigates the game of interests between the platform and restaurants and the resulting impact on food safety risks, and (2) explores the interactions among government regulations, platform profit strategy, and restaurant behavior. An evolutionary game model between the capital-monopolized online food delivery platform and the restaurants was developed with an optional promotion fee and government regulation level as variables. Analysis of four equilibrium situations derived from the evolutionary game model showed that the platform always pursued high overall profit in every equilibrium situation. This capitalist profit-seeking behavior will most likely reduce the profit margins and even the survival space of restaurants on the platform, forcing them to engage in opportunistic behavior and illegal production, thereby resulting in increased food safety risks in online food delivery and consequently increased government regulation costs. Although increased government regulation can change the production strategy of restaurants, it cannot change the platform’s capitalist profit-seeking behavior. The platform’s overall payoff is not reduced due to increased regulation, which once again proves the profit-seeking nature of capital. The strategy of low commissions but high promotion fees may require greater government regulation to restrain the opportunistic behavior of restaurants. Therefore, the Chinese government regulators can achieve a win-win situation of improved government regulation efficiency and reduced regulation costs by designing new regulatory strategies that do not reduce the platform’s overall payoff.