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Information Systems Frontiers

, Volume 2, Issue 1, pp 31–40 | Cite as

The Dynamics of the Electronic Market: An Evolutionary Game Approach

  • Sulin Ba
  • Andrew B. Whinston
  • Han Zhang
Article

Abstract

The capabilities afforded by network technologies have facilitated the growth of electronic commerce. However, online frauds pose serious challenges to the further adoption of the electronic market. In order to promote trust and reduce transaction risks, various trusted third parties have emerged and new models have been proposed. Will people use the trusted third parties while conducting online transactions? How will the electronic market evolve? This research attempts to identify the different equilibria of the electronic market using an evolutionary game theoretic approach and to explore the best strategy to do transactions in the electronic market. Also, the work provides a theoretical justification to the emergence and necessity of trusted third parties for electronic transactions.

electronic market trusted third party market evolution evolutionary game theory evolutionarily stable strategy 

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Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Sulin Ba
    • 1
  • Andrew B. Whinston
    • 2
  • Han Zhang
    • 3
  1. 1.Marshall School of BusinessUniversity of Southern CaliforniaLos Angeles
  2. 2.Department of Management Science and Information SystemsUniversity of Texas at AustinAustin
  3. 3.Department of Management Science and Information SystemsUniversity of Texas at AustinAustin

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