Research On Government Regulation Of The Violation By Chinese Listed Companies Based On Game Theory

Various appearances of violation by listed companies have not only impaired the interests of investors, but also put a negative influence on the normal development of the financial market. First, in theory, we analysis the necessity of the regulation on the violation by listed companies, the gaming feature of regulation, and the application of the game theory in regulation. Then, we introduce pure strategy game model, mixed strategy game model, and dynamic game model. Then, we develop a three-party mixed strategy game model, analysis the Nash equilibrium and come to some conclusions. Still then, we develop an empirical research on the three-party mixed strategy game model and analysis the sensitivity of the model. Our conclusions are: to increase the effect of government regulation, we must improve the regulating technology, strengthen the punishment, and decrease the regulating cost; improving probability of successful inspect has a better effect than decreasing the regulating cost on decreasing the violation probability; the increasing of inspect probability must result in weakening of punishment and decreasing of inspect effect.