Research On The Game Between FinTech Innovation And Regulation With The Participation Of Third Parties

The regulation adaptation derived from the rapid development of Fin Tech has always been the focus of the financial field,and it is also a research hotspot of scholars at home and abroad.The existing studies mostly focus on the complex relationship between government regulators and regulated parties(Fin Tech platforms),while ignoring the third-party institutions.In fact,the participation of third-party institutions has played an important role in the process of Fin Tech innovation through public opinion supervision.In this regard,from the perspective of game theory,this paper systematically combs the correlation among the participants in Fin Tech innovation,focusing on the characteristics and impact of third-party institutions,so as to provide implementation path and theoretical basis for the construction of multi-party regulatory system of Fin Tech innovation.This thesis introduces the participation of third-party institutions represented by the public media in the traditional regulatory evolutionary game framework,and comprehensively depicts the characteristics of media with multiple factors such as reporting probability,accuracy,language emotion,and platform’s sensitivity to reporting.By reconstructing the income of each game player,this thesis constructs the evolutionary game model between Fin Tech platforms and government,as well as the tripartite evolutionary game model in which Fin Tech platforms,government and third-party institutions participate.The study finds that the accuracy of media reports is the key to its regulatory role.The higher the accuracy of reports,the stronger the constraints on excessive innovation of Fin Tech platforma and the more effective the sharing of government regulatory.In addition,whether the third-party institutions can effectively perform the supervision function depends on the attitude of government on the one hand and the excess return brought by biased reports on the other hand.By analyzing the information asymmetry caused by platform heterogeneity,this paper relaxes the bounded rationality hypothesis,and further studies the trade-off between long-term reputation incentives and short-term excess returns of platforms from the perspective of incomplete information game theory.According to the characteristics of third-party participation,this paper modifies the traditional reputation updating rules to build a unilateral decision-making model of Fin Tech platforms under the dual role of government and third-party participation.By solving the optimal strategy of platforms,it is found that platforms’ decision and the impact of third-party institutions depend on the time preference.When the platform is short-sighted,strengthening government regulation and media supervision is conducive to curbing excessive innovation.When the platform is visionary,the high pressure supervision by public opinion will hinder the formation of reputation,thus weakening the willingness to maintain reputation through compliance innovation.On the basis of the unilateral decision-making model,this paper further combs the coupling relationship between third-party institutions and government regulation,as well as the constraints they play on the platforms.Based on the coupling mechanism,this paper redefines reputation,and constructs an infinite game model between Fin Tech platforms and government under the new reputation incentive,and obtains the perfect Bayes-Nash equilibrium strategy of the game.The results suggest that the third-party participation can be an effective complement to the lack of regulatory and provide incentives for the compliance innovation of Fin Tech platforms.It is also found that the decision of platform depends on its time preference.In particular,when the platform is impatient with time,even if the reputation brings benefits,it is unable to restrain the excessive innovation of the platform.In addition,through a case study of China’s P2 P lending industry,the data shows that the industry performance is inconsistent with the model results,which reversely verifies the research conclusions.Based on the incomplete information game model between the platforms and the government,this paper further considers the possible collusion between the platforms and the thirdparty institutions,and incorporates the decision-making of third-party institutions into the incomplete information game framework.With the new reputation as the adjustment mechanism,this paper constructs a limited-term game model of third-party institutions,Fin Tech platforms and government under the condition of incomplete information.Through the analysis of equilibrium strategies and symbiosis,it is found that a better reputation can bring higher benefits to platforms and third-party institutions,and there is a kind of ”trade-off” relationship between the behavior of the platforms and third-party institutions.In order to avoid the risk caused by this collusive effect,the government should strengthen the ex-post regulation of platforms and the third-party institutions at the same time.