An evolutionary game analysis of rural stock agricultural cooperatives development: Evidence from China

Rural stock cooperatives have emerged as a dominant organizational form in China's agricultural sector since the economic reforms, yet their governance mechanisms face persistent challenges. However, the behavioural dynamics between key stakeholders remain poorly understood. There is also a limited analysis of how institutional flaws contribute to cooperative instability. This study uses an evolutionary game model to analyse strategic interactions between the board and shareholders. It also employs a case study of grassroots cooperatives to root the theory in empirical reality. According to the model, we get four pure‐strategy evolutionarily stable strategies representing four different stages of cooperatives: the initial stage, the development stage, the bottleneck stage and the equilibrium stage. Further analysis reveals that ambiguous legal person status and weak financial governance in early‐stage cooperatives lead to developmental chaos. Later‐stage bottlenecks arise from asset misappropriation and opportunistic behaviour by boards, highlighting systemic risks in current management structures. The study underscores the necessity of professionalized management systems, including hiring trained managers, to ensure cooperative sustainability. These results provide theoretical support for designing incentive‐compatible governance in China's rural cooperatives.