Will the Food Delivery Industry Be Monopolized?

DOI

10.2991/aebmr.k.210917.016How to use a DOI?

Keywords

DoorDash, Market Segmentation, Two-sided platform, Game Theory

Abstract

Nowadays, new technology is growing fast. Shopping and ordering food via the Internet becomes popular in daily life. Especially during the Covid-19 pandemic, the food delivery market was growing bigger and bigger. This paper aims to study the possibility of the food delivery industry becoming monopolized. We analyze the issue from three perspectives. First, market segmentation can have an impact on industry competition. It is difficult to monopolize the food delivery industry because of geographical distance and different consumer preferences among different areas. Second, the food delivery company is a typical two-sided platform. The platform establishes balanced competition. The platform participants are not individuals in the food delivery industry. If the pricing structure changes, it will influence consumers’ demand. Since the competitive pressure in the industry, it is difficult to maintain costumer. We also look at the issue from the angle of game theory. In a Money Burn game, whether the incumbent company becomes a monopoly depends on different situations. In the food delivery industry, each delivery company is a participant, and each participant’s gains or losses largely depend on the responses of other participants. The Money Burn strategy would reduce the possibility of new entrances, therefore reinforcing the incumbent company’s market power.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Haozhe Lu
AU  - Mingyang Sun
AU  - Yimin Zeng
PY  - 2021
DA  - 2021/09/18
TI  - Will the Food Delivery Industry Be Monopolized?
BT  - Proceedings of the 2021 International Conference on Financial Management and Economic Transition (FMET 2021)
PB  - Atlantis Press
SP  - 95
EP  - 100
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210917.016
DO  - 10.2991/aebmr.k.210917.016
ID  - Lu2021
ER  -