The Ineffectiveness of “Volume Guarantee” Mode in Live-Streaming: A Nash Bargaining Analysis with Social Network Effects and Traffic Costs
Year: 2025
Type: article
Abstract: The unequal status between manufacturers and live-streamers often undermines supply chain profitability and social welfare. However, the “volume guarantee” commission mode, designed to mitigate this issue, has proven ineffective in practice. This paper adopts a Nash bargaining fairness framework to analyze this paradox, incorporating two defining features of live-streaming commerce: the social network effect and the streamer’s cost of purchasing public domain traffic. We develop a dynamic game model involving the platform, manufacturer, streamer, and consumers to examine commission mode selection and supply chain decision-making. Our analysis yields four key findings: (1) Under Nash bargaining fairness, the “volume guarantee” mode is invariably redundant, regardless of who sets the sales threshold. Bargaining power only influences profit distribution via commission rates without distorting optimal product pricing or traffic acquisition decisions. (2) The social network effect boosts product prices, traffic purchases, total profit, and social welfare, with its impact amplified by the streamer’s fanbase size. Thus, collaborating with top-streamers is advantageous for manufacturers. (3) While higher platform traffic costs do not affect the optimal product price, they reduce traffic purchase volume, thereby decreasing supply chain profits and social welfare. (4) To enhance social welfare, platforms can implement differentiated traffic pricing, offering discounts to top-streamers. This study provides critical managerial insights for designing fair contracts and fostering equitable cooperation in live-streaming ecosystems.
Authors: He Li, Juan Lu
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,207
Awards: G6104825605, G6231270870
OpenAlex ID: W4415908392