Abstract
The signal gaming model based on incomplete information is used to analyze the decisions of commercial banks and medium-sized and small enterprises (SMEs) in supply chain finance business. It is found that the returns of banks are closely relied on the probability of good SMEs join which is proportional to θ (the probability of “good” SMEs in the market) and p (the probability of “good” SMEs chosen to join the supply chain finance) in supply chain finance business, and the default cost is an important constrain for determining the strategies adopted by the SMEs and the banks. To achieve higher returns, SMEs and banks should make effects to create a better supply chain finance business environment to achieve the separation equilibrium.
Highlights
As a new financing mode, supply chain finance has played an increasingly important role in supply chain operational and financial practices and greatly improved the current situation of financing difficulties for medium-sized and small enterprises (SMEs) [1, 2]
The returns of banks closely refer to the probability of good SMEs join in supply chain finance business, denoted as m1, which is proportional to θ and p and is inversely proportional to q
We can find that the higher default cost F can effectively curb the bad SMEs to join the supply chain finance business and enhance the stability of the supply chain financial business
Summary
As a new financing mode, supply chain finance has played an increasingly important role in supply chain operational and financial practices and greatly improved the current situation of financing difficulties for medium-sized and small enterprises (SMEs) [1, 2]. Information is asymmetrical, banks cannot get all needed information, and such Nash equilibrium is hard to produce In this reality, the emergence of supply chain finance has provided new ideas for SME loans. Chain Finance and Bank-MSE Signal Game Based on Incomplete Information. In the supply chain finance mode, the signal game model is used to analyze the game between banks and MSE. (1) “Join” enterprises participate in supply chain finance, and the cost of obtaining core enterprise guarantee is S, and the default cost is F (such as the penalty imposed by core enterprises and banks, the credit loss of non-repayable loans, etc.). (5) Posterior probability: P(C1 | join)= m1; P(C2 | join)=1 − m1; according to Bayes’ rule, you can get the following:. For good companies, when the benefits of “joining” and “not joining” are very similar, good companies will prefer to “join” in order to maintain stable trade income and maintain stable trade targets
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