Speaker: Assistant Prof. Zhang Zhe, University of Texas at Dallas
Time: 10:00-12:00, July 12
Venue: Room 204,Qiyun Building, Chengguan Campus
Abstract:
The latest development of e-commerce transfers a part of the brands’ competition in the traditional market to a new channel, the livestreaming channel. In addition to the excitement generated by the very nature of livestreaming, consumers are attracted to the livestreaming channel because livestreamers often offer lowest-price guarantee. However, it is less clear that how this guarantee offered by the livestreamers affects the brands’ pricing strategy. We develop a micro-economic model which considers two competing brands who contract with a major livestreamer to promote their products on the livestreamer channel. We find that whether the brands charge a lower price in the livestreaming market than that in the traditional market depends on the livestreamer’s commission rate. To understand the effects of the lowest-price guarantee, we analyze a case where the guarantee is absent, and brands charge a higher price in the livestreaming channel than the price in the traditional channel. We find that the brands charge lower prices in the livestreaming channel in the presence of a lowest-price guarantee than the prices they charge in its absence. Moreover, we find that whether the presence of lowest-price guarantee leads to higher profit for the brands or higher surplus for consumers critically depends on the livestreamer’s commission rate and follower size.
Source: School of Management
