Signaling game analysis on B2C transaction of online pharmacy

Online medicine sale is an important form of pharmaceutical enterprises in developing e-commerce. As the particularity of the medicine compared to other products, how the customer judge the quality of the medicine sold by online pharmacies have received special attentions. The paper analyzes the process of transactions between online pharmacies and customers using the method of signaling game and establishes a signaling game model of medicine transaction. In the model, the price of medicine is selected as a signal of pharmacies to transfer their own quality types. The separating equilibrium and pooling equilibrium of the two sides in transaction are obtained. The study has some reference value for customers to judge the quality types of online pharmacies, and then improve transaction efficiency of online pharmacies.