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Under the natural condition there are only sellers and buyers, this paper uses game theory to prove that the development of e-commerce is impossible because of missing information about their trading counterparties, which is well resolved with the introduction of third-party to e-commerce. Based on those discussions, this paper tries to propose new rule - Punishment and Compensation Mechanism based on third-party e-commerce. Through model building and solving, this new rule is elaborated in detail and proved to be a good way that can motivate traders to choose the good faith transactions.
Date of Conference: 16-18 April 2010