Abstract:

The formation of trust among those participating in an on-line market is an important subject, especially in a C2C market that one can enter and leave easily and in which one can easily change onefs identity. Whether participants can trust each other or not will influence the continuation of a market. We therefore discuss the formation of trust in on-line transactions. We believe that a reputation management system is the most effective system for trust formation system. We developed a computer simulation model that describes online transactions with a reputation management system used to share information concerning the reputations of consumers. Its design was based on an agent-based approach used in gprisonerfs dilemmah game theory. Simulation results indicate that a positive reputation system can be more effective than a negative reputation system. The results should provide important suggestions useful in designing a reputation system for online transactions.

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proceedings