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Evolutionary Game Analysis on Innovation Behavior of Digital Financial Enterprises under the Dynamic Reward and Punishment Mechanism of Government

Author

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  • Hao Fu

    (Business School, Hunan University of Science and Technology, Xiangtan 411201, China
    Industrial Development Big Data and Intelligent Decision-Making Hunan Engineering Research Center, Xiangtan 411201, China)

  • Yue Liu

    (School of Social Sciences, The University of Manchester, Manchester M13 9PL, UK)

  • Pengfei Cheng

    (Industrial Development Big Data and Intelligent Decision-Making Hunan Engineering Research Center, Xiangtan 411201, China
    Big Data and Intelligent Decision Research Center, Hunan University of Science and Technology, Xiangtan 411201, China)

  • Sijie Cheng

    (Engineering Institute, University College London, London WC1E 6BT, UK)

Abstract

Digital financial innovation is a new impetus for economic and social development. However, lack of regulation will also have a huge impact on economic and social development. In this paper, an evolutionary game model of digital finance innovation is constructed, the evolutionary strategies of both sides of the game are discussed, and a simulation analysis is carried out, based on the dynamic reward and punishment mechanism of the government. The results show that the system can achieve evolutionary stability under the dynamic reward and punishment mechanism, and that the evolutionarily stable strategy is unique. We also find that when the punishment of regulators increases, the probability of compliance innovation of digital financial enterprises will increase, and the probability of active supervision of regulatory agencies will decrease. When regulators increase incentives, the probability of the compliance innovation of digital financial enterprises will decrease. Similarly, the probability of active supervision by regulators will also decrease and the decrease will be more obvious. To achieve the win-win development of digital financial innovation and regulation, it is necessary to continuously improve the regulatory capacity and level, reduce regulatory costs, and build a dynamic reward and punishment mechanism. Our research contributes to enhancing compliance innovation in digital financial enterprises.

Suggested Citation

  • Hao Fu & Yue Liu & Pengfei Cheng & Sijie Cheng, 2022. "Evolutionary Game Analysis on Innovation Behavior of Digital Financial Enterprises under the Dynamic Reward and Punishment Mechanism of Government," Sustainability, MDPI, vol. 14(19), pages 1-18, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:12561-:d:932091
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    Cited by:

    1. Jianjun Li & Xiaodi Xu & Yu Yang, 2023. "Research on Value Co-Creation Strategies for Stakeholders of Takeaway Platforms Based on Tripartite Evolutionary Game," Sustainability, MDPI, vol. 15(17), pages 1-20, August.
    2. Panke Zhang & Mengtian Wang & Guoqu Deng, 2023. "Evolutionary Game Analysis of Resilient Community Construction Driven by Government Regulation and Market," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    3. Mengzhu Xu & Zixin Liu & Changjin Xu & Nengfa Wang, 2024. "Evolutionary Game Analysis of Digital Financial Enterprises and Regulators Based on Delayed Replication Dynamic Equation," Mathematics, MDPI, vol. 12(3), pages 1-18, January.
    4. Liu, Siqi & Liu, Zixin, 2025. "Analysis of digital financial innovation behavior based on fractional-order evolutionary game," Chaos, Solitons & Fractals, Elsevier, vol. 192(C).

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