The Game Analyses Of Merger And Acquisition Of Multinational Corporation

M&A of Multinational Corporation(MNC) has been an effective way of foreign direct investment. To use the technical advantage, capital advantage and managerial skill, many conditions will be offered by domestic enterprises, including cheaper land price,the equipped capital and facility and so on, which might damage their own interests. This paper will prove that MNCs, domestic enterprises and local government are all seeking their own utility maximization. However, according to Game Theory, So the issue this paper raised are: l.what common behaviour can have a Nash Equilibrium; 2.what institutions can make sure the deviation from the Nash Equilibrium to the perfect situation.Because research field of this paper is a basic point both at home and abroad,what we do is to build models in the perspective of domestic enterprises,which is the core of the theoretic framework.The function of model lies in building basic orientation and model for this field and do some basic,tentative preparation.Main work lies in analysis of participants' perfect ration in a game, then we have made two theoretic hypotheses:economic man and limited ration.Analysis employs the game approach.So it has to set up a game model to imitate the game activities.We expect conclusion can illustrate economic phenomena existing in the game to some extent.Assuming the domestic enterprises are all homage, the conclusion can be drawn: the domestic enterprises which enjoy the higher reputation, are more likely to be by MNCs, even they are lower than the others. Meanwhile, the reputation of local government is also necessary for the M&A.