Fuzzy game theory and Internet commerce: e-strategy and metarationality

Abstract

Many decisions by humans, businesses, and automated agents in Internet transactions can be modeled in traditional game-theoretic terms. Examples include B-to-B price negotiations, B-to-C competition for customers, and C-to-C online auctions. When multiple viewpoints, uncertainty, and interval values are considered, these game theory situations become examples of fuzzy games. In addition, the payoff values weighed during a strategy or e-competition are often not exclusively monetary. Web site visitors have budgets of time, attention, and patience that also have a generalized utility value. Uniquely Internet factors frequently become paramount, such as visual aesthetics, sensory-motor interactivity, and social interplay, as well as affective, habit-based, and loss-prospect-avoidance determiners of their competitive and strategic e-consumer behaviors. These weighed tradeoffs that determine user persistence and Web business success are quite unlike the traditional rational summations in games. A fuzzy game-theoretic approach is explored here that begins to deal with some of the above e-commerce peculiarities.