Modeling the rational behavior of individuals on an e-commerce system. (2018)

• Record Type: Journal Article
• Authors: Aringhieri, Roberto; Duma, Davide; Fragnelli, Vito
• Is Part Of: Operations research perspectives. Volume 5(2018)
• Page Start: 22
• Page End: 31
• Publication Date: 2018
• Subjects: Game theory -- Simulation -- Behavioral OR -- Decision making; Operations research -- Periodicals; Management science -- Periodicals; 658.403405
• DOI: 10.1016/j.orp.2017.12.001
• Languages: English
• ISSNs: 2214-7160

Abstract

Abstract : Highlights: Reputation can reduce the risks of the buyer in the e-commerce environment. Reputation management systems can guarantee the reliability of the transactions. Game theory can model the interaction between the seller and the buyer. Agent Based Simulation is adopted to deal with the game theory approach complexity. A hybrid model is proposed and an extensive analysis proves its feasibility. Abstract: With the increasing popularity of e-commerce systems, commercial transactions are becoming more and more frequent. Such transactions are not direct but mediated, putting the buyer in a position of weakness with respect to the seller, especially in the case of a failure of a transaction. The literature showed that the reputation can play an important role to reduce the risks of the buyer in the current e-commerce environment. An online reputation management system (RMS) maintains the reputation, made of beliefs and/or opinions, that are generally held about someone or something, and it can guarantee the reliability of the transactions that take place in an e-commerce system. Despite of the fact that the basic element of a RMS – the interaction between the seller and the buyer – is a classical field of application of the Game Theory (GT) methodologies, the use of a GT approach in this context seems quite limited and this is probably due to its solution complexity. A way to deal with such a complexity is by exploiting the capability of the agent based simulation (ABS) approach. In this paper, we propose a hybrid GT and ABS model for the analysis of an e-commerce system in which a centralized reputation system is maintained by a trusted third party. We report an extensive quantitative analysis in order to validate the proposed model, and to evaluate the impact of a set of buyers' and sellers' policies on the behavior of the e-commerce system.