Social influence and channel competition in the live-streaming market

We study the impacts of social influence on the stakeholders in the live-streaming market by considering a one-to-two channel in which a common manufacturer sells products via two heterogeneous influencers who may compete for sales. In such a market, consumer purchase decisions depend not only on their intrinsic preferences but also on their social utilities. We adopt a multiunit bilateral bargaining framework to investigate parallel negotiations between the manufacturer and each influencer and then determine a rational expectations equilibrium. Our analysis shows that as social influence level increases, the stronger influencer gradually cannibalizes the weaker influencer's market share, and the manufacturer should switch from cooperating with both influencers to cooperating with the stronger influencer. Moreover, the stronger influencer's profit is always enhanced from live streaming due to social influence but the weaker influencer and manufacturer's profit may not. In addition, whether the manufacturer's profit is enhanced from live streaming depends on influencers' intrinsic difference, social influence level and the relative value of influencers' bargaining power. Finally, we find that even if the prices of the product sold by influencers are higher than those sold in no existence of social influence, consumer surplus is always enhanced from live streaming