Effect of Time Delay on Model Behavior and its Implication for Electronic Transactions in Cyber Space

Newly emerging digital economy provides us a new economic opportunity that replace traditional form of material transaction in physical space with a electronic transaction in cyber space. One notable characteristic of electronic transaction is that thanks to the information technology, electronic transaction can occur with minimal information and delivery delay. One of the key questions with regard to this changing transaction type is the effect of reduced time delay on the level of production, consumption and price of goods in electronic transaction. This paper examines the effect of time delay on electronic transaction by comparing changes in model behaviors in response to changes in time delay such as information recognition delay, delivery delay, production and marketing capacity acquisition delay etc. Three models were used to compare behavior changes; beer game model, commodity production cycle model, and market growth model. Results indicated that effect of reduced time delay on model behavior depends on several factors; competitiveness of market, price elasticity of supply and demand, availability of human resources. Also, the result suggest that availability of human resource is the key factor for a sustained growth of electronic transaction. 1