Topic: Strategic overcapacity in live-streaming platform selling

Speaker: Jianxiong Zhang

Location: Room 306, Glorious Sun Building, Yan'an Road Campus

Time: 2020-12-22 09:30:00

Brief introduction of the speaker: Jianxiong Zhang is a professor and doctoral supervisor in the Institute of Systems Engineering, Department of Management and Economics, Tianjin University. His main research interests are enterprise operation management, complex system modeling and decision making. He was selected as a 2019 Highly Cited Chinese Researchers (in the field of Decision Sciences). He has published more than 100 papers in internationally recognized journals such as EJOR, JOTA, Omega, IEEE Transactions. and Neural Computation, Pattern Recognition, Biological Cybernetics, etc. According to Google Scholar, his papers have been cited nearly 1800 times with an H-index of 23. He is currently presiding over one project of the National Natural Science Foundation of China(NSFC) and has hosted two projects of NSFC, one project of the New Faculty Fund for Doctoral Programs of the Ministry of Education(MOE) and one project of the Humanities and Social Sciences Foundation of MOE. He has participated in one project under the Yangtze River Scholars and Innovative Team Development Program of MOE and one project under NSFC. In 2011, he was awarded the title of Excellent Talents of the New Century by MOE, and in 2012, he was awarded the title of Beiyang Young Scholar by Tianjin University. In 2012, a PhD student named PengSheng Zheng who he offer assistance and guidance to was awarded the nomination award of the 2012 National Hundred Outstanding Doctoral Dissertations. He has received the Second Prize(ranked fourth) of Natural Science Award of MOE in 2014. He is a reviewer of Mathematical Reviews, USA and is an Associate Editor of Journal of Modelling in Management, an international journal of Emerald.

Report Overview: We study the capacity investment strategy of a manufacturer who sells his product on a live-streaming shopping platform. The manufacturer first decides the production capacity, then the platform decides her commission, and finally the manufacturer sets the retail price. The platform has an informational advantage about the product demand due to proximity to the market and accessibility to the sales data of similar products. The manufacturer without a direct access to the demand information tries to infer it from the commission decision of the platform, which results in a signaling game. Interestingly, the manufacturer may strategically install a strictly higher capacity than any demand to be realized. The overcapacity also benefits the manufacturer by driving down the commission charged by the platform when observing a small market potential due to the signaling effect.