E-commerce and its Role in Market Regulation According to Game Theory

The main aim of every economic regime is to reach a stable equilibrium in market regulation.The main factor to gain this,is to control and reducechanges in basic parameters of price and amount ofthe goods in determined limits.As there is a lack of stability in economic equilibrium in developingcountries like Iran,the government has a great role in controlling the demand and supply to get the price constant. The unique characteristics of E-commerce includedincreasing productivity and competition among the organization,decreasing the time of producingcycle,increasing the effectiveness and efficiency inservicing the customers and also decreasing the cost of warehousing,marketing and sale.The mentionedfactors all cause E-commerce to be an extraordinary tool for marketing regulation and reducing the prices. Making decision to arrive in such an era of using Ecommercein countries,like Iran is a difficult task due to different players in the field of business and need a new way of thinking andpolicy.Game theory is a new tool to assess the reactions of policy decision makers in such a field, it is also a new area of studies aimed at decisionmaking in situations of competition and under specified rules . In this paper, we try to use the idea of Game theory to clarify the model which studies the role of e-commerce in regulating markets in Iran. We define some simple games which introduce government and people as its players and discuss therole of each player using the elements of the model . The purpose of this paper is to assess the different behavior of players in business field using Ecommerce characteristics.

Keywords:

E-commerce , marketregulation , gametheory , nash equilibrium