Delivery timeliness disclosure strategy in platform-based instant retail industries: Understanding the effect of consumer loss aversion

In instant retail industries, loss-averse consumers increasingly prioritize delivery timeliness. Nonetheless, platforms might manipulate delivery speed information, leading to unexpected delivery experiences and suboptimal system performance. While existing literature has predominantly focused on quality-related disclosures in platform strategies, this study extends the discourse by examining two underexplored dimensions: the strategic management of delivery speed disclosures in instant retail platforms, and the critical role of consumer psychology in shaping information disclosure frameworks. We develop a game-theoretic model to examine delivery speed disclosure strategy in an instant retail system where a platform collaborates with a brick-and-mortar retailer to deliver online orders. Our model captures consumer psychological reactions to discrepancies between expected and actual delivery speeds. Two scenarios are examined: one with a monopolistic setting and the other with a competitive setting. The results show that the platform is more inclined to disclose delivery speed when consumer loss aversion is strong. In a monopolistic setting, consumer psychological loss from delayed deliveries harms both the platform and the retailer. Interestingly, in a competitive setting, such psychological losses may benefit both parties. Additionally, the platform should disclose the speed information of the retailer’s instant channel when the disclosure cost is low but switch to the self-built instant channel when the cost is high. However, for the entire retail system, the platform should disclose the speed information of the retailer’s instant channel to achieve Pareto improvement. Our findings provide actionable insights for instant retail industries to optimize information disclosure strategies in fast-paced retail environments.