Revenue vs. Welfare: A Comprehensive Analysis of Strategic Trade-offs in Online Food Delivery Systems

Abstract

This paper investigates the trade-off between short-term revenue generation and long-term social welfare optimization in online food delivery platforms. We first develop a static model that captures the equilibrium interactions among restaurants, consumers, and delivery workers, using Gross Merchandise Value (GMV) as a proxy for immediate performance. Building on this, we extend our analysis to a dynamic model that integrates evolving state variables,such as platform reputation and participant retention-to capture long-term behavior. By applying dynamic programming techniques, we derive optimal strategies that balance GMV maximization with social welfare enhancement. Extensive multi-agent simulations validate our theoretical predictions, demonstrating that while a GMV-focused approach yields strong initial gains, it ultimately undermines long-term stability. In contrast, a social welfare-oriented strategy produces more sustainable and robust outcomes. Our findings provide actionable insights for platform operators and policymakers seeking to harmonize rapid growth with long-term