Study on Listed Firms Quality Monitoring: A Game Theory Model
Wang Huan-chen · Industrial Engineering and Management · 2004
The listed firms' quality monitoring is analyzed by using the game theory. The models of one-stage game and multistage games are established, which are based on the different hypotheses between government monitoring regulation and listed firms. The equilibrium strategy is deduced. It is found out that almost impossible to eliminate the phenomena of quality cheating, i.e. false information revelation. Some key factors including the mulct coefficient that the government monitoring regulation punishes listed firms,monitoring cost and cheat amount are also discussed. The suggestions to reduce listed firms' quality cheating are set forth. But, the above mentioned conclusions are just suitable under the hypotheses about the check technology and the monitoring cost.