The game of internet B2B

Game theory accepts the expected utility hypothesis and reduces roles to the "informed" and the "uninformed" player in order to faci I it ate the process of constructing mathematical models. When quality is known to the seller, but not to the buyer, private markets can be modeled as a screening game, and public exchanges as a signaling game. In a private market, the buyer moves first by revealing acceptable quality. In a public exchange, the seller moves first by publicizing product information. Adoption of the technology will ultimately depend on perception of the game and payoffs relative to risks. Price competition is a significant negative externality, and opportunistic representations a real danger. When search costs are low, scope .for differentiation limited, and information about quality is incomplete or impe1ject, the conditions for a lemon's market are fulfilled. A focus on commodities, global reach, and building a positive brand image for Internet business-to-business (B2B) in general should prove effective.