Repeated Game: The Logical Path Choice Of The Credit Cooperation

The problem of credit is a new field in the study of economic theories, which is also a big puzzle in the circulation of economy. Along with the gradual deepening of our country's reform on the socialistic market economic system, the large scale of discredit has heavily affected the healthy development of our economy. With the view of information economy and game theory , this paper points out that in the single one time game, because of the shortage of long term anticipation, the market entity would attempt to take advantage of its superiorities to obtain its maximal benefits, and the result would be the lack of credit. As the repeated game can change each other's information structure and interest structure,and can hold back opportunistic action effectively, it will be the logical path choice of the credit cooperation. ⅠCredit and Game Theory The issue of credit is a study category with rich meanings, which covers many fields including economy, ethnics, psychology, law and so on. It would has different meaning according to different angle of view. Credit is the result of long term development of human society, which began from the period of original exchange. It grew with the deepening of dividing of social works, and gained its highest level development in the period of market economy. The theory of credit has grown up along with the development of commodity economy and the accumulation of culture and morality. Originally it is a issue of ethic studies, but these years economists give pretty more studies on the problem of credit than any other subjects, both in depth and in scope. With wide application of information economy and game theory on the social and economic fields, some of the assumptive conditions of traditional economic theories have been modified, therefore a new direction has been made for the development of credit theory. The game theory studies the process and equilibrium of decision, which is based on the assumption of rational person. It provides a powerful theoretic proof for analyzing and explaining the credit action of a limited rational person. In the economic environment, it is a process of game for a economic entity to choose keeping faith or not, which is based on the interest analyst. Accordingly, it is the most convincing and realistic way to study the credit issue with economic view, especially with a view of game theory. ⅡRepeated Game and the Processing Mechanism of Economic Entity The modern market economy is credit economy in which the essential parts of the credit behavior are made up of the enterprises, the individuals and the government. The interactions among the individual credit, the enterprise credit and the government credit produce the social credit existing in the market economy system. The form of the market entity's credit behavior is a process of repeated game in society. The different decisions-made by the economic entity not only lie on the information structure and the payment function but also the decision and the reflection of the others subject. The credit game behavior of the individual, the enterprise and the government have the different characters, which because they have the different statuses and functions in the social economy life. But in accordance with the game theory,the processing mechanism of the different credit entity is the same. As the market entity would attempt to take advantage of its superiorities to obtain its maximal benefits, the result would be the lack of credit. The repeated game can effectively hold back the both opportunism action and form the common faith of credit cooperation. In the condition of market economy, the benefit of the market entity emerges variation, decentralization and independence. The market benefit drives and affects the interaction between the market entities, which produce plenty of lack of credit. At the present time the market economy order of our country exposes a lot of problems such as the unperfected of the credit system, the lack of the credit consciousness, the distortion of the credit idea, the severe lack of the government credit, the enterprise credit and the individual credit, the vicious competition, the breach of faith of the contract, the cheatings and so on. These problems led to the decline of the whole society credit level and became a obstacle in the operation of market economy. ⅢThe Restricted Conditions of Credit Cooperation and the Realistic Reasons Analysis of Discredit under the Framework of the Game Theory In order to achieve long-term profit, the market entity would choose the credit cooperation not opportunistic behavior in the process of repeated game. In terms of the information economic and the game theory, the game process whether between the economic entity does keep words is a game of both information and benefit, The information structure and the benefit structure are important factors and basis of the decision and equilibrium outcome of game, they are also the basic restricted conditions of credit cooperation. Because of the different of people's own quality, knowledge structure, the existence of social division of work and the deepening of specialization, theinformation asymmetry becomes universal in the real life. In the information environment where credit information transparency is bad and information transmission is unsmooth, because the information is asymmetric and the qualifications is lack to transform one game to repeated game among market subjects, the rational economic person will make the opportunism behavior such as deceit and breach of faith etc. The market subject is inclined to achieve the most benefit and seize the other's surplus by taking their information advantage. So, it is observed that the universal information asymmetry provides the objective growth soil and the environment, the unbalance of information structure is the basic condition to restrict the credit cooperation. A fundamental principle of economics is: Whether the market entity makes some behaviors or not is decided by the comparison of income and the cost brought by its behavior or transaction. Keeping faith and breaching of faith are two kinds of completely opposite behaviors in the economic life. At present, the law and the market mechanism are not suited in our country, and lacking effective stimulus and restraint mechanism, that can not produce the credible threat and promise in repeated game, that can not make powerful penalty to the lack of credit phenomenon, all these cause that the benefit of lack of credit is far more than the cost, and conniving the occurrence of the behavior of discredit. Therefore, from the economic angle, the rational economic person pursues his own benefit maximization, the unbalance of benefit structure is the core condition to restrict credit cooperation. The information structure and the benefit structure have the important effects on not only the balanced result of one game but also the decision and the equilibrium outcome of repeated game. At the same time, repeated game has the reaction on information structure and benefit structure, form credible promise and threat, which is propitious to make steady relation of credit cooperation.ⅣRepeated Game: the Path Choice of the Credit Cooperation Repeated game is the logical path choice of credit cooperation, and is the main means to solve the problem of discredit which caused by asymmetric information. The practice of credit pattern in the overseas developed country also proves that the credit construction should emphasize two aspects——information transmission and cost restriction for preventing fundamentally the formation of discredit. Therefore, Firstly, the precondition of repeated game is that we must construct effective "signaling mechanism", ensure the open and share of social credit information, establish the credit data platform, form the sound information system and information environment in which the transparency is high, the information transmission is unimpeded and improve the information asymmetry. Secondly, the core of repeated game is that we must construct "the credit stimulus mechanism". In order to achieve this goal, we should provide the honest enterprise and individual with the favorable policy and the social environment, stimulate them materially and spiritually on price, prestige, salary and property right and so on. Thirdly, the powerful guarantee of repeated game is that we must construct "the credit restraint mechanism".In order to achieve this goal, we should strengthen law enforcement and the legislation in the aspect of credit, exert the roles of industrial self-discipline in credit system, pay attention to the public voice and moral construction. All these would form credible promise and threat, restrain economic person's opportunism behavior, reduce the happening of discredit.