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In e-commerce, the lack of physical inspection creates valuation uncertainty, which renders information transparency critical to consumer decisions and firm performance. This study examines the impact of information transparency across direct-selling and live-streaming channels. In the live-streaming channel, the streamer can enhance transparency through information facilitation effort. An analytical framework is developed where consumers with uncertain valuations depend on external signals. The results show that as initial information transparency increases, optimal retail prices in both channels follow a non-monotonic pattern; they first decrease and then increase. When initial information transparency is relatively high, the market demand in each channel may increase or decrease, driven by the interplay between the value-enhancement and uncertainty-mitigation effects. Interestingly, when consumers are moderately sensitive to information deficiency, the firm's optimal channel strategy shifts from direct selling to live streaming and subsequently returns to direct selling as transparency increases. From a welfare perspective, even when consumers are relatively insensitive to information deficiency, higher transparency in both channels may still enhance consumer surplus. Furthermore, when the cost efficiency of information facilitation effort is moderate, the streamer's effort exhibits a Matthew effect in which higher transparency induces high effort, whereas lower transparency suppresses it.
Feng et al. (Mon,) studied this question.