Building trust in online auction markets through an economic incentive mechanism

Building trust in online auction markets through an economic incentive mechanism

0.00 Avg rating0 Votes
Article ID: iaor20041036
Country: Netherlands
Volume: 35
Issue: 3
Start Page Number: 273
End Page Number: 286
Publication Date: Jun 2003
Journal: Decision Support Systems
Authors: , ,
Keywords: decision: studies, bidding
Abstract:

Millions of dollars change hands daily through online auction markets. However, fraud has been on the rise in these markets. Using a game theoretic approach, we propose a design of an economic incentive mechanism, the trusted third party (TTP), to serve the online auction communities. The proposed model addresses both the economic and technological aspects of online auction transactions by assigning a digital certificate to each participant. Thus, each participant's identity as well as his or her reputation can be established by other market participants. The analytical results demonstrate that when online transactions, take place with the assistance of digital certificates issued by a TTP, the most utilitarian course of action for a market participant is to behave honestly.

Reviews

Required fields are marked *. Your email address will not be published.