Fairness‐Aware Pricing for Platform‐Operated Restaurants With Social Interactions

ABSTRACT Many restaurants have transformed themselves into platform‐operated outlets by introducing online delivery channels through platforms, in addition to their traditional dine‐in channels. Restaurants typically use differential pricing or uniform pricing for price management. While conventional wisdom suggests that uniform pricing inherently ensures fairness compared to differential pricing, we challenge this notion by demonstrating how platform‐driven social promotion subsidies (e.g., shareable coupons) can create de facto price disparities even under uniform pricing regimes. Such subsidies not only dilute the perceived fairness advantage of uniform pricing but also amplify social interactions among consumers, generating a value‐enhancement effect that paradoxically boosts consumer utility while complicating pricing coordination. This study examines the impact of social interactions and consumers' fairness‐awareness on restaurants' pricing strategies. The most interesting finding we reveal is that when the channel competition is not fierce and the consumers' unfairness aversion is low, the restaurant's preference over pricing strategies switches twice from differential pricing to uniform pricing and then back to differential pricing, as the value‐enhancement effect increases. For platforms, uniform pricing can be more profitable if the value‐enhancement effect is weak, despite the impacts of consumers' fairness awareness and channel competition. In addition, we uncover that uniform pricing leads to a higher consumer surplus when the value‐enhancement effect is moderate, and the region where uniform pricing achieves a higher consumer surplus forms a “scissor‐shaped” pattern as the consumers' fairness awareness increases.