Evolution of cooperative behavior in C2C market: Effect of reputation management system

We model. an online consumer-to-consumer (C2C) market by employing the prisoner's dilemma. To discuss the characteristics of goods traded on a C2C market, we define temptation and contribution indexes based on the payoff matrix of the game. According to the results of the simulation with the model, we find that a positive reputation management system can promote cooperative behavior in online C2C markets. Moreover, we also find that such a system is especially effective for an online C2C market where expensive physical goods are traded, whereas a negative reputation management system is effective for an online C2C market where information goods are traded.