From Traffic-Channeling Gateway to Versatile Bargaining Ability: Strategic Channel Governance and Sustainable Cooperation in Live Stream E-Commerce

In the burgeoning live stream landscape, manufacturers face critical dilemmas regarding strategic channel governance and how intermediaries’ bargaining ability dictates sustainable cooperation under Stackelberg leadership change. Addressing these issues is vital, as misaligned governance risks severe profit losses, yet standard heuristics fail to capture how leadership shifts disrupt channel coordination and model selection. To fill this gap, we model a manufacturer’s self-operated (Model SO) live stream channel and an intermediary-operated (Model IO) live stream channel to evaluate trade-offs among bargaining ability, operational costs, and spillover effects. Key findings show that in Model SO, spillover and price adjustments transform the live stream channel into a traffic-channeling gateway in which rising operational costs paradoxically boost total profits. In Model IO, bargaining ability serves as a key determinant, as high pit fees weaponize this ability for predatory commission-squeezing, while low pit fees redirect it toward volume expansion, transforming the intermediary into a synergistic partner. Furthermore, bargaining ability shifts pricing from intermediary-introduction to profit-recapture strategies while exerting cost-magnification and revenue-magnification effects under varying pit fees. Crucially, we uncover two Pareto-optimal cooperation zones alongside a non-cooperation zone caused by incentive incompatibility under mid-tier bargaining ability. Extensions show that intensified price competition turns dominant intermediaries into welfare killers and high service sensitivity induces an over-service trap, though popularity cost-sharing contracts restore coordination. Overall, this study fills a crucial analytical gap by establishing precise theoretical boundaries for channel governance, bargaining ability dynamics, and cost-driven functional transformations in live stream supply chains.