The risks and costs of electronic commerce have not been sufficiently analyzed. Ian devised a quantitative model for the risks and costs of electronic commerce with certain parameters and assumptions. The certifying authority and the merchant are trusted. Cheaters are modeled by an initial compromise of the system, followed by chances for detection both over time and due to spending rate. This model was used to explore the state space of cheating, and enables a quantified assessment of risks. The model is still in a primitive form, and further analysis and refinement is expected.
Eric Bach asked if the participants in the model as described were behaving rationally. Ian responded that since the model is still in development, the participants don't always behave rationally.