Resolving the information reliability issue in live streaming through blockchain adoption

With live streaming becoming an integral part of a seller’s business strategy, a retailer can choose an influencer from a multi-channel network (MCN) to attract consumers. However, since the MCN may benefit from exaggerating the influencer’s historical live sales data, information asymmetry between the retailer and the MCN exists. This may lead the retailer to misestimate the influencer’s demand-enhancing capability (DEC), and then suffer loss. As the usage of blockchain in providing trust becomes more common, an MCN can apply blockchain technology to signal its data reliably to a retailer. However, conditions for MCN to adopt blockchain and its impact on retailer’s influencers choice has not been investigated so far. To fill this gap, we built a signaling model in which an MCN knows the actual information reliability whereas the retailer does not. We find that the retailer opens a live-streaming channel only if the operating cost is low but the retailer will use its own staff in the live streaming rather than an influencer from MCN if the commission is high. This makes the MCN to refrain from adopting blockchain technology. Meanwhile, the blockchain adoption decisions of the MCN and its impact on the retailer’s influencers choice not only depend on the adoption cost but also the commission. Specifically, when the adoption cost is low, a high-reliability MCN benefits more from adopting blockchain technology, which incentivizes the retailer to choose a high-DEC influencer; as the adoption cost increases, retailers become unable to judge the MCN’s information reliability, especially when the commission level is too low or too high; when the adoption cost increases to a moderate range, multiple equilibria co-exist, indicating that an MCN’s willingness to adopt blockchain technology depends on the retailer’s belief. We find that all equilibria survive the intuitive criterion, but, from both types of MCN’s perspectives, the equilibrium without blockchain adoption is always Pareto-dominant. When the adoption cost is high, an MCN has no incentive to adopt blockchain technology.