Manufacturer vs. KOL: a comparative study of decision-making in live streaming e-commerce with consumers’ anticipated regret

Abstract

With the rise of live streaming e-commerce, traditional retail is being gradually replaced by more interactive and real-time selling channels, that offer attractive pricing and have become a key strategy for manufacturer. However, the impact of consumers’ anticipated regret on decision-making within live streaming e-commerce remains insufficiently explored. This study introduces a novel analytical framework based on anticipated regret theory to analyze its effects on the live streaming supply chain. Demand functions for both retail and live streaming products are derived, and a game-theoretic framework incorporating both centralized and decentralized decision-making structures is developed, aiming to analyze the Manufacturer Self-operated (MSO) and Key Opinion Leader (KOL) live streaming models. To validate the proposed models, both theoretical analysis and numerical simulations are conducted to explore the effects of anticipated regret on key operational variables, including pricing strategies, market demand, and firm profitability. Furthermore, a revenue-sharing contract is proposed that optimizes the performance of live streaming e-commerce supply chains by offering managerial insights into pricing strategies, live streaming tactics, and revenue allocation mechanisms, thereby contributing to the sustainable development of live streaming e-commerce. The results reveal three findings: (1) Consumers’ anticipated regret leads to reductions in retail, wholesale, and live prices. (2) Both live streaming service quality and KOL characteristic exhibits threshold effects on pricing and demand. (3) A properly designed revenue-sharing contract improves supply chain coordination and increases profit for both the manufacturer and retailer.