Strategic adoption of live streaming in a duopoly under consumer-perceived quality belief updates

Live streaming commerce has revolutionised online retail through real-time product presentation and interactive engagement, mitigating consumer uncertainty about product-perceived quality in traditional e-commerce. However, high operational costs and heterogeneous streamer abilities hinder brands from adopting live streaming in an increasingly competitive market. We develop a Nash game model to study duopoly brands' live streaming adoption under consumer-perceived quality updates. We find that adoption is not universally beneficial: brands favour it when streamer ability is high; at moderate ability, willingness hinges on commission rate; below a critical threshold, both jointly forgo it. Stronger consumer cognitive inertia demands greater streamer effort. This may create a prisoner's dilemma: both brands adopt although mutual non-adoption would be more favourable. Mitigating adverse effects requires reducing product substitutability, enhancing live streaming's impact on customer-perceived quality beliefs, and strengthening streamer ability. When effectively executed, widespread adoption virtually yields a win-win-win-win outcome: brand commercial success, higher consumer surplus, fulfilled government-mandated corporate social responsibility (CSR) objectives, and a sustainable e-commerce ecosystem, highlighting live streaming's potential to align private incentives with public welfare.