TITLE:
Competitive Effects of Live-Streaming Adoption and Product Customization: A Hotelling Duopoly Analysis
AUTHORS:
Linhao Dong, Xiaoya Han, Yunwei Shao
KEYWORDS:
Live-Streaming Commerce, Product Customization, Hotelling Model, Competitive Strategy, Channel Adoption, Platform Commission
JOURNAL NAME:
Journal of Applied Mathematics and Physics,
Vol.14 No.5,
May
27,
2026
ABSTRACT: This study investigates how live-streaming channel adoption and product customization reshape competitive strategies in a duopoly market. Motivated by the rapid growth of live-streaming commerce and the increasing demand for personalized products, we develop a Hotelling-based analytical framework to examine manufacturers’ pricing, customization, demand, and profit decisions under three scenarios: no live-streaming adoption, unilateral live-streaming adoption, and bilateral live-streaming adoption. The model explicitly incorporates consumer responsiveness to live-streaming-based customization, platform commission costs, and return-related considerations. The results show that live-streaming adoption is not universally beneficial. When only one manufacturer adopts a live-streaming channel, the adopting firm can improve product differentiation, increase pricing power, and gain a first-mover advantage, especially when consumers are highly responsive to live-streaming-based customization and platform commissions are relatively low. However, when both manufacturers adopt live streaming, the resulting increase in customization competition and channel-related costs may offset the value created by live-streaming interaction, and bilateral adoption may even reduce profits relative to the benchmark scenario. The analysis further reveals that the joint effect of consumer responsiveness and platform commission generates distinct strategic regions, including anti-coordination, Pareto-improving coordination, and a live-streaming competition trap. These findings contribute to the literature on live-streaming commerce, product customization, and competitive channel strategy by showing that the value of live-streaming adoption depends critically on market conditions and platform governance. The study also offers managerial insights for manufacturers seeking to balance digital channel adoption, customization investment, and competitive positioning.