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Fostering fintech innovation: A tripartite evolutionary game analysis of regulatory sandbox experiments

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  • Zheng, Yulu
  • Wu, Xiaoli

Abstract

The rapid integration of next-gen information technologies in finance has spurred FinTech innovation, posing challenges to regulation. Regulatory sandboxes are pivotal for fostering innovation. This study employs a FinTech innovation regulatory sandbox to analyze a tripartite evolutionary game involving government, FinTech enterprises, and the public. It examines strategic choices, equilibrium points, and the interplay of incentives and costs. Results highlight the pivotal role of FinTech companies. Recommendations include consistent government incentives to optimize resource allocation. In tepid engagement scenarios, FinTech companies and government entities lead the innovation adoption. In a context of significant technology spending, increasing initial willingness is crucial for optimize development.

Suggested Citation

  • Zheng, Yulu & Wu, Xiaoli, 2024. "Fostering fintech innovation: A tripartite evolutionary game analysis of regulatory sandbox experiments," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1302-1320.
    • Handle: RePEc:eee:reveco:v:92:y:2024:i:c:p:1302-1320
    DOI: 10.1016/j.iref.2024.02.060
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    References listed on IDEAS

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    Cited by:

    1. János Kálmán, 2025. "The Role of Regulatory Sandboxes in FinTech Innovation: A Comparative Case Study of the UK, Singapore, and Hungary," FinTech, MDPI, vol. 4(2), pages 1-16, June.
    2. Jingwei Zeng & Tao Huang & Xia Wu & Tengfang Liu, 2025. "Authentic or spurious: an evolutionary game analysis of manufacturing enterprises’ greenwashing behavior under dynamic government regulation," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-23, December.
    3. Qin, Dongfang & Xue, Weixian, 2026. "Digital supply chain finance, manufacturing resilience, and corporate digital maturity," Finance Research Letters, Elsevier, vol. 87(C).
    4. Rahadian, Dadan & Firli, Anisah & Yüksel, Serhat & Dinçer, Hasan, 2024. "Fintech competencies in emerging markets: Cognitive hybrid decision-making approach," Emerging Markets Review, Elsevier, vol. 63(C).
    5. Uttam Golder & Suborna Barua, 2025. "The dynamic linkage between fintech venture capital funding, bank credit flows, and equity market movement: evidence from a global perspective," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-57, December.

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