Shallow or prudent? A firm’s optimal streamer choice in live-streaming e-commerce

In light of the significant influence of streamers’ recommendations on consumer purchase intentions in live-streaming e-commerce, this paper investigates the optimal strategy for a monopoly firm in selecting a cooperative streamer. We develop an analytical model to capture the distinct recommendation strategies employed by the shallow (low-reliability) and the prudent (high-reliability) streamers. Our findings reveal that cooperating with the prudent streamer who possesses a significant reliability advantage over the shallow one is more beneficial for the firm when marketing mass products. Conversely, cooperating with the shallow streamer is more profitable when the prudent streamer’s reliability advantage is minor, or even significant but the firm promotes niche products. The prudent streamer outperforms in profitability when marketing mass products with a high price or when consumers are less tolerant of misleading recommendations, while the shallow streamer performs better when recommending niche products or when consumers exhibit a high tolerance for misleading recommendations. Interestingly, the shallow streamer may not harm consumer surplus, especially when their reliability is relatively high and promoting products that target niche markets, and can even benefit social welfare if consumers are tolerant of misleading recommendations. These findings generate novel managerial insights into live-streaming practice.