Optimal pricing and promotional efforts strategies in a competitive live-streaming supply chain

In the evolving digital commerce landscape, live-streaming sales have become a critical driver of consumer engagement and product diffusion. This study investigates a competitive game-theoretic framework involving two heterogeneous streamers one with a larger follower base (Notable Streamer, NSR) and another with a smaller one (Ordinary Streamer, OSR). The model incorporates viewer-dependent demand and promotional effort to analyze how streamer types influence pricing and effort decisions. Unlike prior studies, we incorporate endogenously determined viewer engagement through effort-cost trade-offs and closed-form Nash strategies for both players, offering a structured lens into real-time competitive dynamics. Under a one-shot non-cooperative setting, we derive equilibrium strategies and show how follower-based advantages influence revenue and promotional tactics. We prove that less price-sensitive streamers can outperform more price-sensitive ones through calibrated effort spending, while excessive reliance on price discounting erodes profitability a finding supported by analytical propositions and sensitivity analysis. We further explore how cost efficiency and base demand shifts impact both players’ equilibrium outcomes. While optimal promotional effort arises from an unconstrained quadratic cost framework, our analysis reveals implicit trade-offs between pricing aggressiveness and promotional spending intensity. The model highlights that streamer heterogeneity significantly affects equilibrium behavior and market outcomes. Our results provide prescriptive insight for platforms and content creators to align promotional investment with market positioning rather than follower scale alone. Limitations and avenues for future research such as coordination mechanisms and dynamic strategy extensions are also discussed.