On the afternoon of June 18, 2024, the 124th session of Chen Daisun Theoretical Economics Lecture Series was held in Room 241 of Mingzhai Building at Tsinghua University. The Institute of Economics of Tsinghua University invited Zhuoxin (Allen) Li, Associate Professor from the University of Wisconsin-Madison, to speak at the lecture. The topic of the lecture was "Regulating On-Demand Delivery Platforms". The session was hosted by Associate Professor Li Hongjun from the Institute of Economics of the School of Social Sciences of Tsinghua University. Associate Professor Xie Danxia, along with several postdoctoral researchers, doctoral students, and other faculty and students from the Institute of Economics of Tsinghua University, attended the lecture.
During the lecture, Zhuoxin (Allen) Li shared the latest research findings on platform regulation. Food delivery platforms (such as DoorDash) charge restaurants a commission, which can be as high as 30% per order. To support small businesses, recent U.S. regulatory scrutiny has begun to limit the commissions for independent restaurants. This study empirically evaluates the effectiveness of commission fee caps on platforms. The analysis shows that in regulated cities, orders and revenue for independent restaurants declined, while orders and revenue for chain restaurants increased. This intriguing finding suggests that chain restaurants, rather than independent ones, benefit from regulations intended to support independents. We found that the platform's discriminatory response to regulation might explain the negative impact on independent restaurants. Specifically, after cities imposed commission caps, food delivery platforms were less likely to recommend independent restaurants to consumers, instead promoting chain restaurants.
Zhuoxin (Allen) Li Speech
After Zhuoxin (Allen) Li presented the paper, the attending teachers and students actively participated in the discussion. They thoroughly exchanged ideas on platform regulation, platform pricing structure, algorithmic discrimination, and other related topics. For example, Prof. Danxia Xie proposed an important future research direction: the impact of policies on consumer welfare (social welfare). Finally, Prof. Li Hongjun summarized the lecture, which concluded amidst applause from the audience.
