HOW CAN THE COMMISSION MECHANISM OPTIMIZE SUPPLY CHAIN IN E-COMMERCE? EXPLORING THE IMPACT OF QUALITY IMPROVEMENT AND SPILLOVER EFFECT

Abstract

Along with the accelerating development of live streaming, the enterprises are increasingly utilizing not only their own online shops, but also cooperate with the celebrities who showcase products in live broadcasts. To explore the impact of quality improvement and the spillover effect of live streaming on the optimal decisions of the enterprise and the celebrity, we construct the Stackelberg game to research decentralized and centralized decision-making structures. Additionally, we consider the role of the commission rate, treated as an exogenous variable, in coordinating the two sales modes (i.e., live streaming and online store). We find that the commission rate has the beneficial impact on the optimal price and profit for supply chain participants, when the spillover effect of live streaming is relatively high under the decentralized decision-making structure. We show that the cost-sharing joint commission mechanism in the quality improvement model of decentralized decision-making will establish the coordination within the two sales modes, leading to the win–win situation for all parties involved, as well as increasing the system profit. Finally, the numerical experiments show that the increase in the commission rate will reduce the celebrity’s sharing proportion of quality improvement cost, thereby reducing the sharing proportion of the supply chain system profit.