An Incentive Mechanism to Promote Honesty in E-marketplaces with Limited Inventory

  • Yuan Liu
  • Jie Zhang
  • Qin Li
Part of the IFIP Advances in Information and Communication Technology book series (IFIPAICT, volume 374)


In e-marketplaces with limited inventory where buyers’ demand is larger than sellers’ supply, promoting honesty raises new challenges: sellers may behave dishonestly because they can sell out all products without the necessity of gaining high reputation; buyers may provide untruthful ratings to mislead other buyers in order to have a higher chance to obtain the limited products. In this paper, we propose a novel incentive mechanism to promote buyer and seller honesty in such e-marketplaces. More specifically, our mechanism models both buyer and seller honesty. It offers higher prices to the products provided by honest sellers so that the sellers can gain larger utility. Honest buyers also have a higher chance to do business with honest sellers and are able to gain larger utility. Experimental results confirm that our mechanism promotes both buyer and seller honesty.


Allocation Algorithm Incentive Mechanism Price Premium Reputation System Price Function 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© IFIP International Federation for Information Processing 2012

Authors and Affiliations

  • Yuan Liu
    • 1
  • Jie Zhang
    • 1
  • Qin Li
    • 1
  1. 1.School of Computer EngineeringNanyang Technological UniversitySingapore

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