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Study On Venture Capital Exit Equity Auction Mechanism Based On Evolutionary Game Theory

Posted on:2012-01-26Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z X ZouFull Text:PDF
GTID:1109330467968356Subject:Management Science and Engineering
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With the November2009China’s official launch of the GEM, venture capital has become the focus of public opinion. As a new pattern of financing system, venture capital promotes high-tech achievement transformation and supplies new economic increase point. Venture capital exit is an important step of venture capital activity, however, asymmetric information in the venture capital exit market can easily lead to moral hazard and adverse selection problems, and further lead to the true value of venture equity can not be revealed. Then, how to reveal the true value of venture equity in the process of venture capital exit is the key problem to solve in this paper. In essence, auction is an effective means of allocating resources and revealing values in the case of asymmetric information. Applying auction theory to the venture capital exit area can reveal the toe value of venture equity to a certain extent, thus effectively avoids the moral hazard and adverse selection problems occurred during the process of VC exit due to asymmetric information.Starting from the phenomenon of VC exit, this paper uses the auction theory and methods to study venture equity pricing problem, designs the venture equity in VC exit market as auction item, and develops an auction mechanism to attract outside investors to enter VC exit market and fiercely bid, which can help reveal the true market value of venture equity, thus achieve rational allocation of resources. At the same time, I apply evolutionary game theory and method to study and explore the evolution rules of bidding strategies of outside investors in VC exit market, then adjust and improve the VC exit auction mechanism accordingly the rules. Finally, I draw relevant conclusions and policy recommendations.Basic framework of this paper is organized as follows:Chapter one is introductory, I describe the background and significance of topics, the domestic and international research status and existing problems, and elaborate the ideas and framework of this study;Chapter two is the relevant theoretical basis, mainly describes the evolutionary game theory and auction theory, which can support the launching of analysis and research in later as a theoretical basis;Chapter three is the basic analytical framework of VC exit equity auction, first introduces the current status and existing problems of VC exit market in China, and then elaborates the basic analytical framework of the venture equity auction;Chapter four is the research on asymmetric information measurement in VC exit market based on D-S theory. First introduce the basic concepts and knowledge of the D-S theory, then use D-S theory to measure the asymmetric information in VC market,which can support venture capitalists to better understand the type of outside investors, and design an appropriate trading mechanisms and trading rules to maximize the seller’s producer surplus, and thus better decision support;Chapter five is the equity auction mechanism design in venture capital exit market. First I design a set of VC exit equity auction mechanism, then make a comparative analysis of this set of auction mechanisms and pricing agreements on trading performance. Finally, I discuss the VC exit equity trading multi-attribute auction mechanism design under the conditions of IPV model and the AV model, respectively;Chapter six and chapter seven are the research on bidding equilibrium based on evolutionary game theory in uniform price auction and discriminatory auction, respectively. This paper explores evolutionary game approach to study the bidding strategy of heterogeneous companies, and finds the general evolution rules of bidding strategies under the different market supply and demand conditions. The results showed that the final bidding evolution not only with the relative payment of bidders, but also with supply and demand conditions in the VC exit market and system’s initial states;Chapter eight is the comparison of two auction types, I compare the uniform price auction and discriminatory auction from the following points:the validity of equilibrium, the seller’s expected revenue levels, ease of collusion, the level of underpricing and barriers to entry;Chapter nine is conclusions and Prospects for future research.The main innovations of this article are as follows:(1) The use of auction theory to study VC exit equity transactions. This paper designs an auction mechanism which meets the conditions of individual rationality and incentive compatibility to facilitate the outside investors to report the true value of venture equity, thus achieve efficient allocation of resources(2) The use of evolutionary game to study bidders bidding strategy.Taking the VC exit auction as the research background, this paper explores evolutionary game approach to study the bidding strategy of heterogeneous companies, the results show that the final bidding evolution not only with the relative payment of bidders, but also with supply and demand conditions in the VC exit market and system’s initial states. It is concluded that setting a lowest bidding limit, hidding the market supply and signal transmission can be effective in promoting bidders to choose high-priced bidding strategy.(3) The use of D-S theory of evidence to measure asymmetric information in VC exit market.This paper uses the improved D-S theory to measure the asymmetric information in venture capital exit, which aims to help the venture capitalist to design dominated trading mechanisms and trading rules to maximize his producer surplus.The example shows that this method is reasonable and feasible.This paper can promote the healthy development of the venture capital industry, as well as provide policy recommendations for the government and relevant departments.
Keywords/Search Tags:venture capital exit, mechanism design, evolutionary game, bidding strategies, asymmetric information
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