Cooperative strategy selection for livestreaming commerce supply chain with network externality

In the ever-evolving landscape of livestreaming commerce, brands (proposing service requirements) and platforms (providing technical and operational support) serve as core collaborative entities facing two-way challenges: brands are constrained by high service costs and operational inexperience, while platforms encounter flow bottlenecks due to insufficient brand service capabilities. This dual challenge requires both parties to collaboratively design cooperation strategies to achieve value co-creation. We apply the Stackelberg Model and Nash Bargaining Model to characterize three cooperation strategies between brands and platforms, namely Simple Cooperation (SPC), Operational Support (OS), and Strategic Cooperation (STC), then analyze the solutions in different scenarios. By integrating fan economy and herd behavior into game-theoretic frameworks, we conduct decision analysis. First, our results show that compared with SPC, both STC and OS can lead to Pareto improvement. Second, when platforms have strong bargaining power and market conditions are sluggish, both parties opt for OS as the equilibrium strategy. Third, STC is optimal when brands and platforms have comparable bargaining power in flourishing markets. Especially as market conditions change, STC can effectively adjust the retail price and stimulate the brand to invest. Three extensions based on revenue sharing and cost sharing mechanisms validate the robustness of the findings. Our research comprehensively investigates the impacts of network externality, livestreaming services, and negotiation power on optimal strategic choices, presenting a robust decision framework that offers practical guidance for the livestreaming commerce ecosystem to foster collaborative growth.