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Chinese Journal of Management Science ›› 2024, Vol. 32 ›› Issue (5): 297-306.doi: 10.16381/j.cnki.issn1003-207x.2022.2589

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Cooperation Modes and Decision Optimization in Live Streaming Commerce

Yongwei Cheng()   

  1. School of Business,East China University of Science and Technology,Shanghai 200237,China
  • Received:2022-11-30 Revised:2023-02-14 Online:2024-05-25 Published:2024-06-06
  • Contact: Yongwei Cheng E-mail:chehan1986@126.com

Abstract:

In recent years, as a distinctive emerging business form in the field of China's digital economy, the live streaming commerce has developed vigorously. Especially in the post-epidemic era, it will play an important role in solving a large number of social flexible employment and even reshaping e-commerce consumption behavior in China. Many well-known companies such as Gree Electric Appliances and Unilever have entered the live streaming market through self-operated live streaming or cooperative live streaming. However, with the diversification of participants in the live streaming, chaos emerges endlessly. Merchants, anchors, and live streaming platforms have suffered a lot of disputes and even resorted to law around price discounts, commission rates, pit fees, platform commissions, marketing and promotion expenses, etc. These phenomena essentially belong to the cooperation or contract governance issues of live streaming commerce.The motivation of this study is (1) What are the main cooperation modes or contract paradigms between merchants and anchors in live streaming? (2) How do they choose an efficient cooperation mode based on actual business scenarios? Are these cooperation modes short-term or long-term stable? (3) In their cooperation, how to determine important decision-making variables such as price discount rate, commission rate, and promotional expenses? How will these variables affect the sales and benefits of live streaming? (4) Can consumers really benefit from these cooperation? Thus, the cooperation modes and decision optimization of anchors and merchants are investigated in live streaming commerce. First, three sequential game modes are developed in which the commission rate is determined by the live streaming market and the commission rate is negotiated by both parties. Second, a new live streaming sales function is designed by introducing live streaming popularity value, price discount rate and live streaming conversion rate. Third, both parties’ optimal strategies, consumer welfare, competitive equilibrium and cooperation stability are examined under different cooperation modes.The results demonstrate that (1) When the commission rate is determined by the live streaming market, the two parties cannot reach a cooperation equilibrium under the six cooperation modes, and it is difficult to achieve long-term cooperation through profit sharing or cost sharing contracts. However, the introduction of a commission rate negotiation mechanism can improve the benefits of live streaming. (2) The current cooperation mode of “merchant decides the price discount rate, and the anchor is responsible for the conversion rate of live streaming” is actually a “prisoner's dilemma” cooperation mode with the lowest live streaming sales. "Just-needed" products or products with low profit margins that consumers are less price-sensitive are not suitable for live streaming commerce. When the market commission rate is high, it is the best cooperation mode for a strong "head" anchor to lead the live streaming. (3) The fixed fee for live streaming does not have a substantial impact on both parties’ selection of cooperation strategies, and there is always a strong “collusive” motive for anchors and merchants to make profits by falsely bidding on the market price (original price) of commodities and formulating high price discount rates. This study contributes to the governance and operation optimization of live streaming market.

Key words: live streaming, e-commerce, platform economy, cooperation mode, game theory

CLC Number: