Speaker: Ma Lijun (Professor), Shenzhen University
Title: Fan Cultivation and Monetization with Network Effects: Competing Influencers and Collaborating Brands
Time: 9:00 a.m. on May 27, 2024
Venue: Conference Room 601, Boxue Building, Jiangning Campus, Hohai University
About the speaker: Ma Lijun, professor, doctoral supervisor, research work is mainly carried out on inventory management, pricing and supply chain coordination from the perspective of behavior and risk, and the related research work provides a theoretical basis for the effective management of petrochemical industry, electronic manufacturing industry and other industries. He has presided over a number of projects at or above the provincial and ministerial level, such as the National Natural Science Foundation of China and the Humanities and Social Sciences Fund of the Ministry of Education. He has published more than 50 papers in important journals and conferences at home and abroad, such as POM, EJOR, TRE, Journal of Management Engineering, Systems Engineering Theory and Practice, etc. He was selected into the first Outstanding Young Teacher Training Program of Guangdong Province, the Peacock Plan of Shenzhen Overseas High-level Talents Class B Talents, and the first Liyuan Excellent Youth Training Program of Shenzhen University. He is also the associate editor of Modern Supply Chain Research and Application, a member of the Operations Research and Management Science Association (INFORMS), a member of the American Production Operations Association (POMS), a member of the China Production Operations Association (POMC), and a director of the Random Service and Operation Management Branch of the Operations Research Society of China.
Abstract: We investigate fan cultivation and monetization with network effects for competing influencers. Influencers are asymmetric in content creation ability, and each influencer cooperates with a brand. They act as marketplaces and monetize their fame by charging commission fees for selling the cooperating brand’s products to consumers. Influencers compete for fans by adjusting content quality in the fan-cultivation stage, and brands determine product prices in the monetization stage. We study myopic influencers caring for short-term sales revenue and farsighted influencers incorporating long-term benefits from consumer surplus. We derive the equilibria of the quality-pricing game between influencers and brands for myopic and farsighted influencers. We reveal how commission rates, content costs, network externality levels, and farsight levels affect the competing influencer marketing supply chains. For myopic influencers, we find that a higher revenue share of a brand does not always benefit the brand. On the other hand, a higher commission rate to an influencer benefits the channel consisting of the influencer and the brand. From the social welfare perspective, it is better for a brand to take a larger share of revenue. The larger the gap between influencers’ abilities is, the greater the social welfare is. For farsighted influencers, we find that caring more about consumer surplus does not necessarily lead to an improvement in consumer surplus. A higher consumer-surplus weight hurts (resp. benefits) a high-ability (resp. low-ability) influencer and the cooperating brand. As the weight on consumer surplus increases, the content quality gap between the influencers shrinks; hence, a low-ability influencer cannibalizes a high-ability influencer’s fans, which may reduce consumer surplus, profit, and social welfare of the high-ability influencer’s channel. Further, as an influencer cares more about consumer surplus, the cooperating brand is more inclined to adopt influencer marketing than run the business by itself, and a brand tends to cooperate with a low-ability influencer rather than a high-ability one.
Sponsors: Department of Management Science and Information Management, Institute of Management Science and Engineering
All teachers and students are cordially invited to participate!
