The Game Analysis Of The Arbitrary Control Behavior Of Local Government And Enterprise About Corporate Irregularities

In recent years, local governments have flexible control system, causing enterprises'unpredictable and chaos. For example, if the control behavior is non-institutional andnon-stability, coupled with performance chasing and the deficiency of restriction system, thiswill cause repeat building, local protectionism and negative competition, leading to the failureof local governments'controlling.Based on the public choice and cognitive bias theory, this paper analyzes the arbitrarycontrol behavior of local government in game theory, and constructs a game model on interestbetween the local government and enterprises. The result shows that under the circumstancesof local government weak control and lack of social credit system, firms can obtain a betterperformance through a larger number of irregularities, and the local government would bedifficult to resist the temptation from enterprises which provide more bribery,it will becomea umbrella of firm and become into enterprise conspiracy, then its control of the enterprise willbe more random. In order to enhance the credibility of the conclusions, this paper analyzes thecase of"substandard milk powder"with game theory framework.According to the study,we get some conclusions；Rent-creating and conspiracy betweengovernment and enterprises is an important reason which led to the arbitrary control behavior oflocal government; Reduce the cost of Strong control of local governments and improve businessirregularities confiscated cost can effectively reduce the corporate irregularities; Lack of SocialCredit and disadvantaged social intermediary organizations Prompted the corporate irregularitiesand the arbitrary control behavior of local government...