Research on the Quadrilateral Evolutionary Game of Governance for Small Property Rights Housing on Rural Land in China

Abstract

As China’s urbanization process continues to accelerate and the price of traditional commercial property continues to rise, a number of small property rights houses without construction permits and approvals have appeared on rural land. Although small property rights housing does not have the validity of property rights or the legal attributes of ordinary commercial housing, and the Chinese government has repeatedly introduced corresponding laws and regulations to regulate its purchase and sale, small property right housing is still purchased by many consumers because of its price advantage, and the number of disputes arising from its purchase and sale is on the rise every year. In addition, the phenomenon of developers building on rural land in violation of the law and real estate agents guaranteeing property without authorization has led to a waste of judicial resources and the infringement of property rights. This paper analyzes the actual situation and the main problems surrounding the governance of small property rights housing and constructs a quadrilateral evolutionary game model with the government, consumers, developers, and real estate agents as the main players. By analyzing various equilibrium points corresponding to different stages of small property rights housing governance, a simulation analysis is conducted using Matlab2016a software to examine the strategic choices of each stakeholder. By adjusting and simulating various parameters, this study investigates the key factors influencing the governance of small property rights housing. This study revealed the following points: (1) at different stages in the governance of small property rights housing, the choice of a strategy by each subject is affected by the expected benefits and costs; (2) the relevant government fines will regulate the strategic choices of developers and real estate agents; (3) consumers’ purchasing tendency is affected by the price of small property rights housing and the risk estimation; (4) the governance of small property rights housing needs a long-term standardization of practice, and the government not only needs to improve the reward and punishment mechanism but also needs to provide positive guidance to the consumers. Through numerical simulation, we explore the impact of the main parameters of the current small property rights housing governance process on the strategic selections made by the game players, which is of great significance for the current policy and future governance of small property rights housing. This paper contributes additional insights to the existing body of theoretical literature through quantitative analysis. Nonetheless, there is a need for the further refinement of the parameter settings used in the study. Additionally, while the simulation analysis provides valuable perspectives, it is somewhat subjective and possesses certain limitations.