Game Theory Analysis Of Institution Changes

As the implementation of gradual reformation in China, collective community system has been replaced with household contract system. In the recent 20 years, more and more problems have come out so that the reformation cost is increasing rapidly. Consequently, considerable attention should be paid to two important issues: 1,can gradual reformation be sustained; 2, what is the ideal reformation path in the next phase. The relative research on these issues can strengthen our confidence in the procedure of reformation. Besides, it can also benefit the pursuit of key to difficult problems. In this paper, evolution game theory is applied to analyze the gradual reformation in order to give enough study on the two issues. Firstly, brief introduction is given to the game theory and institution economics. We draw the conclusion that in the informal institution, the role of county is weak. While, as the development of professional production, big market and high technology, government is playing a dramatically important role in the forms and changes of institution. An institutional gradual game theory is established to study our gradual reformation. Then, a conclusion is drawn: under the condition that transmitting gains is more than cost, reformation can be implemented by the way of gradual system. Finally, we believe administrative reformation is the beginning of reformation in the next round in china.