Optimal Pricing in Livestreaming E-Commerce: A Game Approach Considering the Effect of Spillover

Livestreaming e-commerce leads to a profound change in distribution channels, and taking advantage of this, increasing manufacturers implement a dual-channel strategy: in addition to their official online site, they cooperate with anchors and launch a new distribution channel - livestreaming channel. This dual-channel strategy brings new challenges to manufacturers. First, manufacturers need to balance two channels to maximize their profits. Second, manufacturers should take into account the spillover effect of livestreaming channels to better formulate pricing strategies. In response to these challenges, the paper proposes a dual-channel pricing model with the coexistence of livestreaming channel and online official website, and explores spillover effect of livestreaming channel on dual-channel pricing and profits. The results show two main findings: First, for manufacturers, the introduction of the livestreaming channel may not necessarily increase their profits in case that live livestreaming channel is not mature and lack of spillover effect. Second, profits of the manufacturer and the anchor are larger in the presence of spillover than that in the absence of spillover. The stronger the spillover effect, the greater the profits of manufacturers and anchors.