Environmental economics

Microeconomics

Economics

Market economy

Computer science

Mathematical optimization

Differential game

Coordination game

Business

Computer network

Subsidy

Operations research

Revenue sharing

Mathematics

Revenue

Industrial organization

Finance

Live streaming

Managerial and Decision Economics

Live streaming selling is setting off new waves worldwide, especially in China. Considering the effects of number of viewers and average reference price, this paper investigates the optimal decisions of platform's recommending effort and streamer's selling effort by differential game theory. We find that if the platform sets a higher revenue‐sharing rate, its effort to recommend streamer will decrease, which could reduce the platform's and streamer's revenues. Thus, we propose a subsidy mechanism that incentivizes the streamer to increase investments in platform's recommendations, while enabling the platform and the streamer to achieve a win–win situation by setting reasonable revenue‐sharing rates.

Optimal decisions and coordination of live streaming selling under revenue‐sharing contracts