Evolutionary Game Analysis of Online Shopping Quality Control: The Roles of Risk Attitude and Government Supervision

Abstract

The product quality issues of online shopping have not been effectively solved with the rapid development of electronic commerce in China. Faced with the quality issues of online shopping, the main entities, such as online platforms and online sellers, should cooperate to control and assure compliant quality. The adverse selection of buyers caused by information asymmetry and the moral hazard of sellers aggravated by bilateral markets make the quality management of online shopping have a high degree of uncertainty and complexity. This study constructs an evolutionary game model to discuss the dynamic process of the quality behaviours of members and analyse the key triggers of the evolutionary directions in online shopping. By using numerical simulation analysis, the influences of government supervision intensities on the evolution trend of members’ quality behaviours are analysed with various risk attitude combinations in various cases. The current research finds that (1) the decrease of the quality control cost and the increase of the government’s benchmark fine are conducive to increasing the platform’s controlling probability; (2) the decrease of the proportion of rent and the increase of sellers’ fraud cost and the government’s benchmark fines are conducive to increasing the seller’s compliance probability; (3) when both the platform and seller are unwilling to make efforts for quality assurance, risk-seeking members make the seller gradually choose to provide compliant products; and (4) when the members are all risk-seeking, strengthening government supervision will help promote the transition of members’ behavioural choices in a benign direction. This paper enriches the theoretical research studies on both online product quality control and government-led social governance system of quality. Suggestions for government supervision and e-commerce entities are also provided for quality assurance and improvement.

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“…In the field of quality supervision , the evolutionary game method is applied to the study of inland waterway pollution regulation. and Wen et al (2021) studied the quality supervision of online shopping from the perspective of government regulation by using evolutionary game theory. built an evolutionary game model of the government, contractors, and the public to study the problem of project quality supervision.…”

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“…In the field of quality supervision (Xu et al, 2021), the evolutionary game method is applied to the study of inland waterway pollution regulation. He et al (2021) and Wen et al (2021) studied the quality supervision of online shopping from the perspective of government regulation by using evolutionary game theory. Yang et al (2021) built an evolutionary game model of the government, contractors, and the public to study the problem of project quality supervision.…”

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“…Peng et al [34] assumed that platform operators empower service providers to improve service quality, and the equilibrium conditions of the whole network are obtained based on variational inequality and equilibrium theory. Wen et al [35] discussed the quality control behaviors of platforms and sellers in online shopping and analyzed the infuence of government regulation on the evolution trend of members' quality behavior under the situation of information asymmetry. However, in the research of these documents, the price is regarded as a fxed value, which cannot change according to the diferent supply and demand situations, which is not in line with the reality.…”