A reputation model considering repurchase behavior and mechanism design to promote repurchase

Abstract

In electronic commerce environment, reputation systems have been widely investigated for several decades towards building secure online market platforms. In this paper, we propose a new reputation model considering the repurchase behavior of buying agents (buyers). The buyer repurchase behavior is described by three factors: recency, frequency, and monetary. Since the repurchase behavior is essential for the survival of vendors in e-commerce in the long run, we further design a price premium based mechanism to encourage customers to conduct repeat transactions with their satisfactory selling agents (sellers). Theoretical analysis and simulation based experiments are conducted to evaluate the proposed system. The results show that there exists a unique pure strategy Nash equilibrium where buyers always repurchase from satisfactory sellers and sellers behave honestly.