The growing prevalence of deceptive low-quality products exacerbated by the expansion of online commerce has prompted high-quality manufacturers to reconsider their counterstrategies. This study examines a supply chain with a high-quality manufacturer and a retailer that sells a mixture of high-quality and low-quality products, falsely labeling them as high-quality. Game-theoretic models are developed to explore the effectiveness of adopting the manufacturer’s official livestream channel as a countermeasure against deceptive low-quality products. Then, how adopting an official livestream channel impacts stakeholders’ payoffs is examined. Our key finding indicates that the manufacturer can effectively resist deceptive low-quality products by adopting an official livestream channel, provided that the manufacturer focuses on educating consumers while avoiding excessive information disclosure in livestreams. It can also boost the manufacturer’s profit if the marginal cost of adopting a livestream channel is low and the level of information enhancement is sufficiently low or sufficiently high. Contrary to common belief, we find that adopting the manufacturer’s official livestream channel does not necessarily disadvantage the retailer. Under certain conditions, livestream channel adoption creates a win-win-win scenario for the high-quality manufacturer, the retailer, and the consumers. • The manufacturer can effectively resist deceptive low-quality products by adopting an official livestream channel. • It can not only combat deceptive products but also boost the manufacturer’s profit in some situations. • The retailer can be better-off from manufacturer’s official livestream adoption because of the mitigation of the double marginalization. • The manufacturer, retailer and consumers may achieve a win-win-win situation from the manufacturer’s official livestream channel adoption.
Yao et al. (Wed,) studied this question.