IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v83y2025ics096969892400448x.html
   My bibliography  Save this article

Manufacturer encroachment through live streaming considering consumer disappointment aversion

Author

Listed:
  • Dong, Jingyang
  • Guan, Zhimin
  • Yu, Tianyang
  • Guan, Xingrui
  • Zhang, Jun

Abstract

Live streaming (LS) sales are increasingly popular, leading many manufacturers to adopt the LS channel to encroach on the online market. Three characteristics of the LS channel are identified: (1) Real-time interaction reduces product matching uncertainty. (2) The increase in product matching probability mitigates consumer disappointment aversion (CDA). (3) Increased entertainment and trust enhance consumers valuation of products. Considering a supply chain that includes a manufacturer and an online retailer, we investigate the manufacturer’s LS channel encroachment strategies for both centralized and decentralized scenarios. We find that LS channel encroachment always occurs in the centralized scenario but may not necessarily take place in the decentralized scenario. Specifically, if CDA intensity is strong and product matching probability is small, the manufacturer adopts replacement encroachment. If product matching probability is moderate, the manufacturer employs competition encroachment. However, if product matching probability is large and LS’s valuation enhancement effect is low, the manufacturer avoids encroachment in the centralized scenario but chooses threatening encroachment in the decentralized scenario. Finally, although CDA can promote encroachment, it always makes the manufacturer worse off. Intuitively, CDA weakens the online retail channel’s competitiveness, thereby harming the retailer. However, our study reveals an interesting finding: When product matching probability is sufficiently large and LS’s valuation enhancement effect is low, CDA makes the retailer better off.

Suggested Citation

  • Dong, Jingyang & Guan, Zhimin & Yu, Tianyang & Guan, Xingrui & Zhang, Jun, 2025. "Manufacturer encroachment through live streaming considering consumer disappointment aversion," Journal of Retailing and Consumer Services, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:joreco:v:83:y:2025:i:c:s096969892400448x
    DOI: 10.1016/j.jretconser.2024.104152
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096969892400448X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2024.104152?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Guan, Xu & Wang, Yulan, 2022. "Quality disclosure in a competitive environment with consumer’s elation and disappointment," Omega, Elsevier, vol. 108(C).
    2. Zhang, Tao & Tang, Zhongjun, 2023. "Should manufacturers open live streaming shopping channels?," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    3. Fan, Xiaojun & Zhang, Lu & Guo, Xin & Zhao, Wenyu, 2024. "The impact of live-streaming interactivity on live-streaming sales mode based on game-theoretic analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 81(C).
    4. Junbin Wang & Xing Zhang, 2023. "The value of influencer channel in an emerging livestreaming e-commerce model," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 74(1), pages 112-124, January.
    5. Wongkitrungrueng, Apiradee & Assarut, Nuttapol, 2020. "The role of live streaming in building consumer trust and engagement with social commerce sellers," Journal of Business Research, Elsevier, vol. 117(C), pages 543-556.
    6. Ye, Fei & Ji, Li & Ning, Yu & Li, Yina, 2024. "Influencer selection and strategic analysis for live streaming selling," Journal of Retailing and Consumer Services, Elsevier, vol. 77(C).
    7. Duan, Yongrui & Song, Jia, 2024. "The adoption of live streaming channel considering impulse buying and product returns," International Journal of Production Economics, Elsevier, vol. 274(C).
    8. Kyle Cattani & Wendell Gilland & Hans Sebastian Heese & Jayashankar Swaminathan, 2006. "Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel," Production and Operations Management, Production and Operations Management Society, vol. 15(1), pages 40-56, March.
    9. Yang, Wenting & Govindan, Kannan & Zhang, Jiantong, 2023. "Spillover effects of live streaming selling in a dual-channel supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    10. Huang, Song & Chen, Yuqing, 2023. "Manufacturer encroachment with competing dual-purpose online retail platforms," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    11. Lu, Yusheng & Duan, Yongrui, 2024. "Strategic live streaming choices for vertically differentiated products," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    12. Huang, Lingchen & Liu, Bin & Zhang, Rong, 2024. "Channel strategies for competing retailers: Whether and when to introduce live stream?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 413-426.
    13. Fei Gao & Xuanming Su, 2017. "Online and Offline Information for Omnichannel Retailing," Manufacturing & Service Operations Management, INFORMS, vol. 19(1), pages 84-98, February.
    14. Yong Zha & Quan Li & Tingliang Huang & Yugang Yu, 2023. "Strategic Information Sharing of Online Platforms as Resellers or Marketplaces," Marketing Science, INFORMS, vol. 42(4), pages 659-678, July.
    15. David Gill & Victoria Prowse, 2012. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," American Economic Review, American Economic Association, vol. 102(1), pages 469-503, February.
    16. Baojun Jiang & Chakravarthi Narasimhan & Özge Turut, 2017. "Anticipated Regret and Product Innovation," Management Science, INFORMS, vol. 63(12), pages 4208-4323, December.
    17. Li, Bo & Jiang, Yushan, 2019. "Impacts of returns policy under supplier encroachment with risk-averse retailer," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 104-115.
    18. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2007. "The Bright Side of Supplier Encroachment," Marketing Science, INFORMS, vol. 26(5), pages 651-659, 09-10.
    19. Zhou, Chi & Yu, Jing & Qian, Yong, 2024. "Should live-streaming platforms nonexclusively promote brands from traditional retail platforms?," Journal of Retailing and Consumer Services, Elsevier, vol. 80(C).
    20. Zhang, Ying & Zhang, Juliang, 2017. "Strategic customer behavior with disappointment aversion customers and two alleviation policies," International Journal of Production Economics, Elsevier, vol. 191(C), pages 170-177.
    21. Du, Shaofu & Wang, Li & Hu, Li, 2019. "Omnichannel management with consumer disappointment aversion," International Journal of Production Economics, Elsevier, vol. 215(C), pages 84-101.
    22. Zhang, Yanfen & Xu, Qi & Zhang, Guoqing, 2023. "Optimal contracts with moral hazard and adverse selection in a live streaming commerce market," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).
    23. Paolo Letizia & Morteza Pourakbar & Terry Harrison, 2018. "The Impact of Consumer Returns on the Multichannel Sales Strategies of Manufacturers," Production and Operations Management, Production and Operations Management Society, vol. 27(2), pages 323-349, February.
    24. Xu, Xiaoping & Hong, Zhaofu & Chen, Yujing & Cheng, T.C.E., 2023. "When is it wise to use artificial intelligence for platform operations considering consumer returns?," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1188-1205.
    25. Xin, Baogui & Hao, Yaru & Xie, Lei, 2023. "Strategic product showcasing mode of E-commerce live streaming," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    26. Gul, Faruk, 1991. "A Theory of Disappointment Aversion," Econometrica, Econometric Society, vol. 59(3), pages 667-686, May.
    27. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    28. Baoshan Liu & Xu Guan & Yulan Wang, 2021. "Supplier Encroachment with Multiple Retailers," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3523-3539, October.
    29. Jianqiang Zhang & Krista J. Li, 2021. "Quality Disclosure Under Consumer Loss Aversion," Management Science, INFORMS, vol. 67(8), pages 5052-5069, August.
    30. Leela Nageswaran & Soo-Haeng Cho & Alan Scheller-Wolf, 2020. "Consumer Return Policies in Omnichannel Operations," Management Science, INFORMS, vol. 66(12), pages 5558-5575, December.
    31. Zhang, Wen & Yu, Lili & Wang, Zhenzhen, 2023. "Live-streaming selling modes on a retail platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).
    32. Doron Sonsino, 2008. "Disappointment Aversion in internet Bidding-Decisions," Theory and Decision, Springer, vol. 64(2), pages 363-393, March.
    33. J. Jeffrey Inman & James S. Dyer & Jianmin Jia, 1997. "A Generalized Utility Model of Disappointment and Regret Effects on Post-Choice Valuation," Marketing Science, INFORMS, vol. 16(2), pages 97-111.
    34. Zhen, Xueping & Wang, Ping & Li, Xinran, 2024. "The Streamer's sales strategy choice considering sales effort," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    35. Xu, Jian & Duan, Yongrui, 2020. "Pricing, ordering, and quick response for online sellers in the presence of consumer disappointment aversion," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    36. David E. Bell, 1985. "Disappointment in Decision Making Under Uncertainty," Operations Research, INFORMS, vol. 33(1), pages 1-27, February.
    37. Mao, Zhaofang & Du, Zelin & Yuan, Ruiying & Miao, Qiqi, 2022. "Short-term or long-term cooperation between retailer and MCN? New launched products sales strategies in live streaming e-commerce," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    38. Wan, Xing & Chen, Jing & Li, Wei, 2023. "The impact of retail pricing leadership under manufacturer encroachment," European Journal of Operational Research, Elsevier, vol. 310(1), pages 217-237.
    39. Yina Li & Yu Ning & Weiguo Fan & Ajay Kumar & Fei Ye, 2024. "Channel Choice in Live Streaming Commerce," Post-Print hal-04717617, HAL.
    40. Graham Loomes & Robert Sugden, 1986. "Disappointment and Dynamic Consistency in Choice under Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(2), pages 271-282.
    41. Albert Y. Ha & Shilu Tong & Yunjie Wang, 2022. "Channel Structures of Online Retail Platforms," Manufacturing & Service Operations Management, INFORMS, vol. 24(3), pages 1547-1561, May.
    42. Xie, Lei & Guo, Guangtao & Chen, Jiao, 2024. "Bundling products and service on influencer channels," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    43. Dae-Hee Yoon, 2016. "Supplier Encroachment and Investment Spillovers," Production and Operations Management, Production and Operations Management Society, vol. 25(11), pages 1839-1854, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fan, Xiaojun & Zhang, Lu & Guo, Xin & Zhao, Wenyu, 2024. "The impact of live-streaming interactivity on live-streaming sales mode based on game-theoretic analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 81(C).
    2. Zhang, Haiyue & Sui, Ronghua & Zha, Xiaoyu, 2025. "The key opinion leader introduction and pricing strategy for live streaming e-commerce platforms considering the impact of network effects," Journal of Retailing and Consumer Services, Elsevier, vol. 82(C).
    3. Shen, Yinhai & Zhang, Qing & Zhang, Zhichao & Ma, Xinyu, 2022. "Omnichannel retailing return operations with consumer disappointment aversion," Operations Research Perspectives, Elsevier, vol. 9(C).
    4. Liu, Jiqiong & Yuan, Rui & Feng, Shuai & Wang, Guanxiong, 2025. "Quality-differentiated distribution strategies between live streaming and online channels," Journal of Retailing and Consumer Services, Elsevier, vol. 82(C).
    5. Zhen, Xueping & Wang, Ping & Li, Xinran, 2024. "The Streamer's sales strategy choice considering sales effort," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    6. Xu, Jian & Duan, Yongrui, 2020. "Pricing, ordering, and quick response for online sellers in the presence of consumer disappointment aversion," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    7. Wang, Jie & Ma, Benedict Jun & Yang, Yanyi & Cheng, Chun-Hung & Kuo, Yong-Hong, 2025. "Group buying with consumer disappointment at failed deals," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 194(C).
    8. Zhou, Chi & Yu, Jing & Qian, Yong, 2024. "Should live-streaming platforms nonexclusively promote brands from traditional retail platforms?," Journal of Retailing and Consumer Services, Elsevier, vol. 80(C).
    9. Lu, Wei & Ji, Xiang & Wu, Jie, 2025. "Retailer’s information sharing and manufacturer’s channel expansion in the live-streaming E-commerce era," European Journal of Operational Research, Elsevier, vol. 320(3), pages 527-543.
    10. Zhibao Li & Beifen Wang, 2025. "Retailer information sharing under manufacturer encroachment and production cost reduction," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(1), pages 602-626, January.
    11. Matsui, Kenji, 2024. "Should competing suppliers with dual-channel supply chains adopt agency selling in an e-commerce platform?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 587-604.
    12. Wan, Xing & Chen, Jing & Li, Wei, 2023. "The impact of retail pricing leadership under manufacturer encroachment," European Journal of Operational Research, Elsevier, vol. 310(1), pages 217-237.
    13. Liang Liang & Jingxian Chen & Dong‐qing Yao, 2023. "Switching to profitable outside options under supplier encroachment," Production and Operations Management, Production and Operations Management Society, vol. 32(9), pages 2788-2804, September.
    14. Xu, Xiaoping & Wang, Yuting & Cheng, T.C.E. & Choi, Tsan-Ming, 2024. "Should live broadcasting platforms adopt artificial intelligence? A sales effort perspective," European Journal of Operational Research, Elsevier, vol. 318(3), pages 979-999.
    15. Niu, Baozhuang & Ruan, Yiyuan & Xu, Haotao, 2024. "Less is more? Channel separation to mitigate triple competition and combat copycats in agency e-commerce," European Journal of Operational Research, Elsevier, vol. 315(1), pages 242-270.
    16. James Andreoni & Charles Sprenger, 2011. "Uncertainty Equivalents: Testing the Limits of the Independence Axiom," NBER Working Papers 17342, National Bureau of Economic Research, Inc.
    17. Li, Nianlin & Xuan, Changchun & Chen, Rui, 2024. "Different roles of two kinds of digital coexistence: The impact of social presence on consumers' purchase intention in the live streaming shopping context," Journal of Retailing and Consumer Services, Elsevier, vol. 80(C).
    18. Ponnachiyur Maruthasalam, Arulanantha Prabu & Balasubramanian, Ganesh, 2023. "Supplier encroachment in the presence of asymmetric retail competition," International Journal of Production Economics, Elsevier, vol. 264(C).
    19. Yongjin Yin & Shengwang Meng, 2025. "The Effect of Disappointment Aversion on Risk Prevention," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(2), pages 1108-1124, March.
    20. Liu, Minjian & Du, Shaofu & Nie, Tengfei & Zhu, Yangguang, 2024. "Pricing, channel design, and platform operations with buy-online-and-pick-up-in-store in online food delivery market," International Journal of Production Economics, Elsevier, vol. 274(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:83:y:2025:i:c:s096969892400448x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.