Counterfeit Governance Strategies in E-Commerce Platforms from a Systems Perspective: An Evolutionary Game and System Dynamics Approach

Abstract

Background: Counterfeit governance in e-commerce platforms is a real-world problem characterized by strategic interdependence, information asymmetry and dynamic feedback among platforms, merchants and consumers. Linear or single-actor regulatory approaches are often insufficient to address such complexity, as platform regulation, merchant behaviour, consumer trust and online reputation mechanisms jointly shape the evolution of market trust. Methods: Guided by systems thinking, this study conceptualizes counterfeit governance as a socio-technical system and develops a tripartite evolutionary game model involving e-commerce platforms, merchants and consumers. The model delineates the system boundary around transaction-stage platform governance and incorporates key variables, including regulatory costs, fraudulent gains, honest transaction costs, subsidies, penalties, consumer transaction costs, online word-of-mouth influence and reputation losses. System dynamics simulation using Vensim PLE 10.5.2 is then employed to examine evolutionary trajectories, local stability, parameter sensitivity and threshold regions. Results: The results show that weak or static regulation may allow fraudulent strategies to persist or fluctuate, whereas stronger penalties and subsidies for honest transactions can reshape the payoff structure and promote merchant integrity. Transaction-related consumer incentives and enhanced online word-of-mouth mechanisms support consumer trust and stabilize the system toward trustworthy transactions. Conclusions: This study operationalizes systems thinking through system dynamics, while evolutionary game theory provides behavioural micro-foundations for stakeholder strategy adjustment in digital platform governance.