The value of livestream accidents when the brand cooperates with a competitive influencer

Abstract Livestream selling has experienced quick growth recently, in which brands partner with influencers to promote product sales. Having amassed considerable fan bases and cultivated substantial loyalty among their audiences, some influencers are creating their own brands and becoming their brand customers’ competitors (competitive influencers hereafter). Then, should the brand go on contracting with such competitive influencers? We analyze the pros and cons of their coopetitive relationship by considering the existence of both traditional and fan consumers. Traditional consumers are flexible to purchase any product, while fan consumers solely purchase the influencer's promoted products. We find that the brand benefits when the competitive influencer's commission rate is moderate. Taking the influencer's livestream accidents into account, we find that the supply chain resilience performs better in the no cooperation scenario, and the livestream accidents do not necessarily hurt the brand. Interestingly, we find that either a high or a low commission rate will compel the brand and the competitive influencer to set higher selling prices. This may hurt consumer surplus, but the competitive influencer can significantly be benefited, even confronting a low commission rate.