TITLE:
AI Self-Streaming or KOL Live Streaming with Service Assurance? Pricing and Strategy under Product Returns
AUTHORS:
Linhao Dong, Xiaoya Han, Mengdie Li
KEYWORDS:
Live-Streaming Commerce, Product Returns, Pricing, Channel Strategy, Service Assurance, Game Theory
JOURNAL NAME:
Open Journal of Applied Sciences,
Vol.16 No.5,
May
27,
2026
ABSTRACT: Live-streaming commerce has become an important retail format, yet retailers still face substantial uncertainty regarding livestreaming mode choice and service design when product returns are significant. This paper develops an analytical decision model to study a platform retailer’s joint decision on livestreaming mode and service assurance. Specifically, the retailer chooses between AI self-streaming and KOL live streaming, while also deciding whether to adopt service assurance in the presence of demand expansion, return risk, platform commission, KOL commission, AI investment, and the salvage value of returned products. The results show that service assurance always increases the retailer’s optimal price under a given livestreaming mode, and that the optimal price under KOL live streaming is higher than that under AI self-streaming. However, service assurance does not necessarily improve demand or kept sales; it is beneficial only when its willingness-to-pay effect is sufficiently strong relative to the induced return burden. In addition, both the service-assurance decision and the livestreaming-mode choice follow threshold rules. Most importantly, service assurance is more likely to complement AI self-streaming than KOL live streaming, because AI self-streaming is less sensitive to expectation-induced returns. Numerical analysis further illustrates the underlying mechanisms and strategy regions.