Faculty Scholarship 1994 - Present

Thomas Hobbes and Adam Smith Shopping on eBay

In this paper we examine eBay as an experiment in creating a self-regulating market based on trust and cooperation with minimal reliance on the police mechanisms of the state to enforce compliance on those who would cheat. We conduct a thought experiment in which two notorious skeptics, Thomas Hobbes and Adam Smith, consider whether it would be rational to buy and sell on eBay and whether honesty or dishonesty would be their best policy as eBay participants. Our goal is to elucidate conditions of successful markets such as trust, information transparency, feedback mechanisms and punishment for cheaters.