E-procurement and market evolution: An evolutionary game approach

Nowadays both hype and negative claims about e-procurement permeate the Internet, making the market hesitate over the choice between online and offline. From the evolutionary game perspective, this paper presents one of the very first analyses of market evolution in such a dilemma. By developing an evolutionary model, it addresses the decisive factors that govern the course of market evolution, and uncovers the basic rules of market dynamics, on which proposals propitious for spurring the shift from the traditional marketplace to the e-marketplace are put forward. It concludes with that a thorough shift is probably built on an effort by the buyer to constrain his own bargaining power or to share benefits with the supplier. Simulation findings and their broad implications based on homogeneity assumptions in this paper constitute an initial analytical basis for an extended economic model in future research.