Influencer selection and strategic analysis for live streaming selling

Abstract

The increasing popularity of live streaming selling on e-commerce platforms, along with the expanding number of influencers. There are currently two primary categories of influencers: the first refers to top influencers who have a large fan base, resulting in increased popularity and bargaining power. The second category comprises regular influencers who have a smaller fan base, resulting in diminished popularity and bargaining power. Furthermore, sellers are required to consider two pricing strategies, namely the differential pricing strategy and the uniform pricing strategy. We develop a game model to analyze the preferences of the seller regarding influencer types and pricing strategies. We discover that the seller's preference for the influencer depends on the influencer profession's average bargaining power and the fixed payment of the top influencers. When both are less than a certain threshold, the seller prefers to cooperate with the top influencer, and the threshold of both increases under the differential pricing strategy. At the same time, the seller's tolerance for the top influencer's fixed payment increases as the top influencer's popularity increases. It is also observed that the implementation of a differential pricing strategy consistently leads to higher profits compared to a uniform pricing strategy. However, considering the social welfare, the seller tends to favor the uniform pricing strategy when the cost coefficient of the influencer exceeds a specific threshold. Our research presents some guidelines for the seller to make strategic decisions on live streaming selling.