The Impact of Government Policies on Natural Monopoly Markets based on Evolutionary Games

Abstract

Financing is difficult during the post-epidemic era. A lot of industries occupied by monopolies are so large that the goods they produce are often "over-priced" and this will have a number of adverse effects on market equilibrium. This paper constructs a game model in which the government, the monopolies and the SMEs wishing to enter the monopoly market are the main actors, and this article analyzes the impact of the government's actions on the monopoly market and make conclusive recommendations. The final choice of three sides of the game can be obtained by discussing whether the government chooses to regulate the monopoly market with subsidies and taxes, whether the monopolies set high or low prices and whether the Small and medium-sized enterprises are willing to enter the monopoly market. The final analysis of the evolutionary game model concludes that: the strength of government regulation is the decisive factor in the final Nash equilibrium point of the game.