Strategic interaction between institutional investors and supervision department:a theoretical analysis of low‑price collusion in SBIC  

作　　者：Xin Li Zhuming Chen 

机构地区：[1]School of Economics,Sichuan University,Chengdu 610065,China [2]School of Business,Sun Yat-sen University,Guangzhou 510275,China

出　　处：《Financial Innovation》2023年第1期1313-1348,共36页金融创新（英文）

基　　金：funded by the National Natural Science Foundation of China(72172164);Natural Science Foundation of Guangdong Province(2021A1515011354).

摘　　要：We introduce evolutionary game method to analyze low-price collusion in inquiry market of Sci-Tech Innovation Board of China(SIBC)from the perspective of strategic interaction between large institutional investors(LIIs),small and medium-sized institutional investors(SMIIs),and supervision department(SD).The results show that supervision behaviors of SD,and quotation behaviors of institutional investors,are subject to supervision conditions.Under the condition that benefits of tough supervision are lower a lot than minimum benefits of light supervision(light supervision condition),SD will choose light supervision and institutional investors will turn to illegal quotation in response.Finally,a steady-state equilibrium with low-price collusion will form in SIBC’s inquiry market even with a large supervision penalty for illegal quotation.On the contrary,under the condition that benefits of tough supervision are higher a lot than maximum benefits of light supervision(tough supervision condition)and with a large penalty for illegal quotation,SD and institutional investors will choose tough supervision and legal quotation.Further numerical simulations under light supervision condition show that:(1)High-price culling rule will become a booster for low-price collusion and accelerate SMIIs’evolutionary process to imitative quotation.(2)Blindly increasing penalties for illegal quotation or reducing the culling rate is not an appropriate approach to solve the problem of low-price collusion since it cannot shift supervision condition from light into tough and make SD supervise toughly.(3)Institutional investors’choices of quotation strategies are more volatile and highly susceptible to supervision behaviors of SD when facing exogenous uncertainty.Therefore,the keys to solving the problem of low-price collusion are shifting supervision condition from light into tough through increasing incremental benefits of tough supervision,and providing institutional investors with a stable and predictable supervision policy.In concl

关 键 词：Sci-Tech Innovation Board of China Low-price collusion Supervision condition Tripartite evolutionary game 

分 类 号：F832[经济管理—金融学]