Game Theory Analysis On Stock Industrial Land Redevelodment

To ensure smooth urban function transformation and maximize interests of all parties, the layout of urban industrial land is supposed to match urban industrial structure and the supply of urban industrial land is supposed to meet its demand quantitatively and structurally.Currently, many cities in China are experiencing function transformation. Shanghai is considered to be a typical example. Shanghai, used to be concentrated in industrial production, is now changing into a multifunctional metropolis with its focus on financial industry and shipping industry. However, it is found that a large amount of industrial land is in vacant condition or used with low efficiency, which obviously goes against the city’s development tendency. To fit the upgrading of urban industrial structure and to satisfy newly emerged urban space demands, the redevelopment of stock industrial land is regarded with great necessity.Although many state-owned enterprises have the use rights of industrial lands, these state-owned enterprises, typically the ones supervised by state council and municipal government, do not have direct administrative relationship with district-level government. Therefore, during the redevelopment of industrial land, the local government, as the land owner, and the industrial enterprise, as the land user, are interacting in an interest game in most cases. In the year of 2014, the local government of Shanghai introduced a new policy encouraging enterprises to commence redevelopment on their own. Based on the policy, this paper builds a dynamic game model to deduce game behavior and finds that the local government has both views as a land owner and of public management. If the local government only has the view as a land owner, the typical equilibrium will be that the enterprise complies with the policy. If the local government only has the view of public management, the typical equilibrium will be that the enterprise shows no response to the policy and the local government compromises. Besides, factors like revenue recognition from enterprise’s side, compensation and cost for land acquisition and storage, time delay of redevelopment, are the crucial elements which would change the typical equilibriums above into other special equilibriums. Then based on evolutionary game theory with bounded rationality, this paper builds an evolutionary game model to analyze how the local government’s view preference would influence the equilibrium and to work out a marginal weight coefficient. Last but not least, considering the fact that the enterprise may not be able to forecast the local government’s view preference correctly, four kinds of scenarios are discussed. It is found that when the local government prefers the view as a land owner while the enterprise forecast on the contrary, the industrial land would be acquired by the local government as a result.According to the conclusion, some policy suggestions are given. It is suggested that both parties should collaborate to make optimal functional orientation. The municipal government is recommended to build a redevelopment time schedule evaluation system. Governments at all levels are suggested to strengthen cooperation and normalize acquisition and storage process. Policy consistency and stability should be ensured. Besides, the local government is also encouraged to give the enterprise support on the fund of redevelopment.