An analysis of salary mechanisms in the sharing economy: The interaction between streamers and unions

Abstract Live streaming, a recently emerged service in the sharing economy era, is already very popular in China and is growing in the US market. Besides streamers (those who make the content) and the platform itself, unions of streamers are important stakeholders in live streaming platforms because they act as the streamers' agents. Because the union's salary mechanism will significantly influence the behavior of streamers, in this paper, we investigate the interaction between the streamers and unions from the perspective of salary mechanism. Specifically, we introduce a salary mechanism denoted by ( θ , R , T ) for the union and then set up a game model between the union and streamers. While the proceeds of streamers depend on their efforts, the union's salary mechanism also significantly influences the efforts of streamers in the union. Streamers determine whether to join the union or not, as well as their efforts under the two alternatives. The union's goal is to optimize its salary mechanism, as well as to determine its effort level in the streamer's virtual room. Our results show that: (i) whether a streamer will join the union depends on both the union's salary mechanism and the streamer's ability; (ii) the salary mechanism ( θ , R , T ) can be used to implement either the elite talent strategy or the huge-crowd strategy; and (iii) the union's optimal salary mechanism is significantly influenced by the platform's share rates to the union and streamers. In this paper, the properties of the union's optimal salary mechanism are analyzed. This paper contributes to the literature by being the first to incorporate a salary mechanism into studies of the live streaming economy.