Evolutionary Game Analysis of Debt Restructuring Involved by Asset Management Companies

Abstract

Based on the evolutionary game theory, this article constructs a quartet evolutionary game model for debt restructuring with the participation of asset management companies; studies the interactive mechanism of complex behaviors among the government, banks, asset management companies, and enterprises; and analyzes the stability of the strategies of each game subject. It also analyzes the stability of the equilibrium points in the system and finds the stable points that maximize the interests of each subject. Research shows that the government chooses to give specific support, banks choose debt-to-equity swaps, asset management companies choose to provide liquidity, and enterprises choose to work hard, which can better promote the debt restructuring process. Finally, using Matlab2018 software to analyze the impact of each essential element in the debt restructuring on the stability of system evolution, the research results provide a basis for the successful debt restructuring of the enterprises.

Mechanism Analysis of Strategy Choice of Bankruptcy Reorganization Participants under Government Incentive Mechanism

“…Hypothesis 1: e government, enterprises, investors, and creditors constitute the main players in the bankruptcy reorganization system. e probability of the government participating in bankruptcy reorganization with particular support is x, and the probability of participating in bankruptcy reorganization without particular support is 1-x; the probability of creditors participating in a bankruptcy reorganization in the form of debt relief is y, and participating in bankruptcy reorganization through debt-to-equity swap is 1-y; the probability of investors participating in a bankruptcy reorganization in the form of providing liquidity is z, and the probability of participating in a bankruptcy reorganization in the form of providing high-quality assets is 1-z; the probability of participating in a bankruptcy reorganization in the form of reform and transformation is k, and the probability of participating in a bankruptcy reorganization in the form of maintaining the status quo is 1-k [13][14][15][16]. Hypothesis 2: Government participation in bankruptcy reorganization can encourage all parties to cooperate in bankruptcy reorganization.…”

“…e form in which the government chooses to participate in bankruptcy reorganization is related to y, so thisstudy can judge the situations of F(x) and F′(x) by analyzing the size of y [16][17][18]. Proposition 1.…”

“…zA(y)/zy < 0, A(y) is the decreasing function of y; the conditions for x � 1 to be stable are as follows: y<y 0 , A(y) >0, F(x)| x � 1 � 0, and F′(x)| x � 1 <0. e conditions for x � 0 to be stable are as follows: y 0 , A(y) < 0, F(x)| x � 0 � 0, and F′(x)| x � 0 <0; when y � y 0 , A(y) � 0, F(x) � 0, and F′(x) � 0, the stability cannot be determined at this time [16].…”

“…e creditors' strategy choice is related to k, so this study can judge the situation of F(y) and F′(y) by analyzing the size of k [16].…”

“…zB k /zk < 0, and B(k) is the decreasing function of k. e conditions for y � 1 to be stable are as follows: k<k 0 , B(k)>0, F(y)| y � 1 � 0, and F′(y)| y � 1 <0; the conditions for y � 0 to be stable are as follows: k > k 0 , B(k) < 0, F(y)| y � 0 � 0, and F′(y)| y � 0 <0; when k � k 0 , B(k) � 0, F(y) � 0, and F′(y) � 0, the stability of the system is difficult to determine at this time [16]. at is, the enterprises' strategy will affect the creditors' strategic choice.…”