The Research On Industry Policy Analysis Model Based Evolutionary Game Theory

Industrial policy is an important means to guide, protect and promote economicdevelopment as well as sustainable growth, which has a positive and significant role ofpromoting industrial restructuring, correct deficiencies of the market mechanism, improve thequality of economic growth, and accelerate the transformation of ways of economicdevelopment, especially in the critical reform and development stage of our country.Economic development and sustainable growth is the product of the industry and technologyconstant upgrade. And this update process can be achieved by cooperation of public andprivate sectors. Analysis of industrial policy in conventional economics mainly focuses on thepolicy recommendations. But the evolution mechanism of industrial policy has received lessattention so far.Evolutionary game is a new research field, which was developed from the classical gametheory in economics. Due to its strict logic and mathematical framework, it has recentlydrawn great attention from many disciplines, such as Mathematics, Econometrics andEvolutionary Biology. Compared with the classical game, we will pay more attention toevolution characteristics, bounded rationality, incomplete information to explain themechanism of the industrial policy.For small groups, players in decision-making games were regarded as perfectly rationalindividuals in previous research, which is obviously inconsistent with realistic situations. Webegin with approximate best response dynamics, introduce the function expression ofbounded rationality, and examine the evolution process. We find that compared with theresults of classical replicator dynamics, the rock-scissor-paper cycle also occurs, butcharacteristics with evolution process (the equilibrium point and evolution path) is different.Simultaneously, approximate best response dynamics can avoid the limitation possessed byreplicator dynamics, and make the simulation results approach to experimental results.For large groups, we introduce a new decision-making criterion into a voluntary publicgoods game with incomplete information and choose the successful strategies according to theearlier history payoff of a certain as well as the risk-averse benefit. In addition, we found thatthe interest rate of common pool and the length of memory have crucial effects on the averagewelfare of the whole group; the appropriate sense of individuals’ innovation also substantiallyinfluences the equilibrium strategies distribution in the long run.