Dynamic game model of E-commerce — Based on the perspective of information asymmetry

Based on the perspective of information asymmetry, this paper uses game theory to construct a model, focusing on phenomena of concealing and cheating which are common in E-commerce between buyers and sellers in the process of transaction. Under the premise of setting participants, utility function and external environment, we take each equilibrium solution from signaling game and game of complete information to form a comparative analysis. As a result, we find out that lower level of information asymmetry do improve overall effectiveness level of the industry, and generate a positive impact on the efficiency of transaction; last but not least, governmental control plays a crucial regulatory function.