Evolutionary game analysis of Bank Credit Retreat

Abstract

At the beginning, this paper gives a brief interpretation of the concept of bank credit retreat and the current research status of this issue in the world. Based on the research of adverse selection and moral hazard problems between banks and enterprises, this paper presented the concept of bounded rationality and established the evolutionary game framework of Bank Credit Retreat. Given the replication dynamic analysis and the stable point analysis of the evolutionary game model, the evolutionary stable strategy has been given from the perspective of parameter analysis. The conclusion that due to information asymmetry between banks and enterprises the two players of the game can not reach an evolutionary stable strategy (ESS) has been obtained. During the process of bank credit retreat and considering the effective prevention of adverse selection of banks and moral hazard of enterprises, the selection and verification cost of the banks, the penalty cost when the “dishonest” corporate is checked and the loss of reputation are the factors affecting evolutionary stable strategy.