A Study Of Financial Innovation Mechanism Under Route Constraint

With socialist market economic system being gradually established, as well as financial markets orederly open, the financial innovation appears more and more in the the practice of financial services industry. Therefore, in order to promote the independent innovation ability and core competitiveness ability of financial intermediary and improve the sustainable and healthy development in financial services industry, it is very important to launch and increase researches on financial innovation mechanism.The present dissertation sets out to study the financial mechanism. By using the improved Hotelling price competition model, it does not only analyze the micro-motivity of financial intermediary about financial innovation, but also market evolution. It defines the domestic financial market's pattern categories and proves the strategies steady state consistent with the Nash equilibrium of financial intermediary can be accessed through game learning behavior. Refering the defaultable bond pricing diversification as an example, the dissertation analyzes investors' preference and belief in the financial innovation pricing mechanism. According to the new development in financial regulation mode, it gives a quantitative analysis on the incentive influcence of government regulation on financial innovation.Firstly, the dissertation studies the influence of the investors'heterogeneity on micro-motivity of financial intermediary about financial innovation and further analyzes the evolution equilibrium in financial innovation. By introducing the"transport cost"to measure heterogeneity of investors, the dissertation proves that the probability distribution of"transport cost"will affect the pricing game equilibrium. If leading innovators benefit from the new equilibrium caused by financial innovation in the game, they will continue innovating, so do the following innovators. Therefore the financial innovation will be kept on. Based on evolutionary game theory, it makes a study of the condition and rule of the adoption and diffusion in financial innovation, so it gets the financial intermediaries'evolutionary stable strategies, which gives apocalypse for government decision-making on financial innovation programming. It comes to the conclusion that: financial intermediaries'innovation micro-motivity will be strengthened if there does exist beneficial equilibrium route in the evolutionary game of financial innovation. The conclusion reveals that altering the investor composing proportion by developing institutional investor is conducive to a financial innovation development.Secondly, the dissertation studies the financial intermediaries'game learing behavior and Nash equilibrium in gradual financial innovation. Through reviewing jump and time-dependent volatilities in investors'demand on innovation securities, it relaxes the assumption in the literature that investors'demand submits to geometric Brown motion, which can further approximates the realistic situation of domestic financial market. It classfies the domestic financial market's pattern categories by defining game structure in financial innovation, including strategies set, action order and payoffs. Based on game learning theory, it proves that the dominant strategy satisfying Nash equilibrium can be obtained by game learning. It comes to the conclusion that: the establishment of market pattern in financial innovation is the result of game stable states obtained through game learning and strategy adaption in the game among financial intermediaries.Thirdly, taking the defaultable bond as an example of financial innovation product, the dissertation discusses the phenomenon of financial innovation product pricing diversification and studies the financial innovation pricing mechanism. By inspecting"hidden differences"in defaultable bond contract, it logically explaines and quantitatively characterizes the investor's preference for defaultable bond. It also proposes the definition about implement cost in financial innovation and analyzes its causation. Based on social choice theory and game theory, it discusses the investors'social goals and implementation in pricing mechanism. It analyzes the game equilibrium in pricing mechanism with informational asymmetries between investors and financial intermediaries through a signalling game model. It comes to the conclusion that: financial intermediary can transfer the implementation cost as a signal of his reputation to investors, the difference of reputation results in pricing diversification.Finally, the dissertation studies the government incentive policy and regulation mode about financial innovation. By analyzing the strategies in the game between financial intermediary and government, it proposes a definition of efficient stimulation cost to depict government's incentive influence on financial innovation. The dissertation also obtains the equilibrium resulted by the efficient incentive policy. By constructing bond-stock interchanging contract model, it compares the Anglo-American regulation mode and the German regulation mode, so does the new mode―second order regulation. It comes to the conclusion that: the government and financial intermediary can select appropriate strategies in the financial innovation to gain a win-win situation, the win-win degree is relevant with the type of the regulation mode.At the end of the dissertation, it raises issues which should be further studied.