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Evolutionary food quality and location strategies for restaurants in competitive online-to-offline food ordering and delivery markets: An agent-based approach

Author

Listed:
  • He, Zhou
  • Han, Guanghua
  • Cheng, T.C.E.
  • Fan, Bo
  • Dong, Jichang

Abstract

In the booming online-to-offline (O2O) food ordering and delivery market, numerous independent restaurants are competing for orders placed by customers via online food ordering platforms. The food quality and location decisions are deemed to be the two principal considerations of restaurants in this emerging market. To investigate the evolutionary food quality and location behaviours of restaurants, we propose an agent-based O2O food ordering model (AOFOM) that consists of three types of agents, namely customers, restaurants, and the online food ordering platform. We explicitly model their adaptive behaviours by optimizing the agents' benefits. We find that customers' behaviours have significant impacts on the restaurants' food quality decisions. Besides, the relationship between the restaurant's location decisions and customers' waiting time is less significant in the O2O food ordering market due to the presence of an equalizing delivery service provided by the online platform. We also examine the characters of best restaurants, as well as the impacts of different delivery policies on the food quality and location decisions of restaurants.

Suggested Citation

  • He, Zhou & Han, Guanghua & Cheng, T.C.E. & Fan, Bo & Dong, Jichang, 2019. "Evolutionary food quality and location strategies for restaurants in competitive online-to-offline food ordering and delivery markets: An agent-based approach," International Journal of Production Economics, Elsevier, vol. 215(C), pages 61-72.
    • Handle: RePEc:eee:proeco:v:215:y:2019:i:c:p:61-72
    DOI: 10.1016/j.ijpe.2018.05.008
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    1. Morgan Swink & Kejia Hu & Xiande Zhao, 2022. "Analytics applications, limitations, and opportunities in restaurant supply chains," Production and Operations Management, Production and Operations Management Society, vol. 31(10), pages 3710-3726, October.
    2. Fan Cheong & Rob Law, 2022. "Will Macau’s Restaurants Survive or Thrive after Entering the O2O Food Delivery Platform in the COVID-19 Pandemic?," IJERPH, MDPI, vol. 19(9), pages 1-19, April.
    3. Tong, Tingting & Dai, Hongyan & Xiao, Qin & Yan, Nina, 2020. "Will dynamic pricing outperform? Theoretical analysis and empirical evidence from O2O on-demand food service market," International Journal of Production Economics, Elsevier, vol. 219(C), pages 375-385.
    4. Zhang, Jian & Woensel, Tom Van, 2023. "Dynamic vehicle routing with random requests: A literature review," International Journal of Production Economics, Elsevier, vol. 256(C).
    5. Prashant Raman, 2022. "Fear of Coronavirus on Continuance Intention to Use Food Delivery Apps," Journal of Electronic Commerce in Organizations (JECO), IGI Global, vol. 20(2), pages 1-22, April.
    6. Han-Shen Chen & Chia-Hsing Liang & Shu-Yi Liao & Hung-Yu Kuo, 2020. "Consumer Attitudes and Purchase Intentions toward Food Delivery Platform Services," Sustainability, MDPI, vol. 12(23), pages 1-18, December.
    7. Tsai, Pei-Hsuan & Chen, Chih-Jou & Hsiao, Wei-Hung & Lin, Chin-Tsai, 2023. "Factors influencing the consumers’ behavioural intention to use online food delivery service: Empirical evidence from Taiwan," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    8. Ma, Shigui & He, Yong & Gu, Ran & Yeh, Chung-Hsing, 2024. "How to cooperate in a three-tier food delivery service supply chain," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    9. Zhang, Yiyue & Ha, Hong-Youl, 2024. "The evolution of consumer restaurant selection: Changes in restaurant and food delivery application attributes over time," Journal of Business Research, Elsevier, vol. 170(C).
    10. Du, Zhong & Fan, Zhi-Ping & Sun, Fenghao, 2023. "O2O dual-channel sales: Choices of pricing policy and delivery mode for a restaurant," International Journal of Production Economics, Elsevier, vol. 257(C).
    11. Burlea-Schiopoiu, Adriana & Puiu, Silvia & Dinu, Adina, 2022. "The impact of food delivery applications on Romanian consumers’ behaviour during the COVID-19 pandemic," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    12. Daniel Belanche & Luis V. Casaló & Carlos Flavián & Alfredo Pérez-Rueda, 2021. "The role of customers in the gig economy: how perceptions of working conditions and service quality influence the use and recommendation of food delivery services," Service Business, Springer;Pan-Pacific Business Association, vol. 15(1), pages 45-75, March.
    13. Du, Zhong & Fan, Zhi-Ping & Chen, Zhongwei, 2023. "Implications of on-time delivery service with compensation for an online food delivery platform and a restaurant," International Journal of Production Economics, Elsevier, vol. 262(C).
    14. Das, Manoj & Ramalingam, Mahesh, 2023. "To praise or not to praise- Role of word of mouth in food delivery apps," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).
    15. Yida Zhai & Guanghua Han, 2022. "The effect of the inspection information sharing policy on quality‐oriented food production in online commerce," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 84-96, January.
    16. Shah, Adnan Muhammad & Abbasi, Amir Zaib & Yan, Xiangbin, 2023. "Do online peer reviews stimulate diners’ continued log-in behavior: Investigating the role of emotions in the O2O meal delivery apps context," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    17. Silveira, Douglas & Vasconcelos, Silvinha, 2020. "Essays on duopoly competition with asymmetric firms: Is profit maximization always an evolutionary stable strategy?," International Journal of Production Economics, Elsevier, vol. 225(C).

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