Dissertation
Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods > Operations Research in the economy > Game Theory

The Reform Logic of China Based on the Bargaining Games

Author TongYiLun
Tutor WangDingDing;YeHang
School Zhejiang University
Course Western Economics
Keywords bargaining non-violent political reform in China
CLC F224.32
Type PhD thesis
Year 2011
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Inheriting the classical political economy tradition of Adam Smith’s thought, the paper studies the institutional changes as the non-violent bargaining process in which the participants constantly adjust to the social contract. We try to focus on gradual reform of Chinese social changes since the opening to world, and thus present a unified logic explanation to it.If we see the civil spontaneous acts, such as the phenomenon of Xiaogang Village’s land contract responsibility and the development of Wenzhou township enterprises, as an objective, broad strategic bargaining behavior, while the resulting changes of garvornment policy be seen as some kind of equilibrium of the bargaining game between the market and planning economics, the article will argue that the internal logic of the bargaining game requires the parties of bargaining have both to reach a compromise on the reform program of cooperation by trade, but also to conflict in the expected return to reform of the bargaining. Thus it makes the bargaining reform not only have cooperation efficiency, and also includes the fair value of confrontation. This "giving priority to efficiency with due consideration to fairness" reforms have typical Chinese characteristics, and give two key meaning to the practice of Chinese reform. First, the potential economic development powers of the system have been liberated through the non-violent bargaining. Second is through the construction of market-oriented economic system, the reform objectives of "Washington Consensus", including competitive, market, and the property rights in resource allocation, have been realized.Thus, the theme of the paper is purely theoretical research, the method is the combination of utilitarian thinking developed by J. Bucanann and the bargaining theory of K. Binmore, and at last it will give a political "Science rational "analysis. Of course, the bargaining reform in China is not the whole story of contemporary social change. In real cases, the latter is more likely a hybrid-down interaction, or even about the intrinsic process of repeated institutional change. However, the perspective of this study proposed that the core reason of China’s social and economic development is precisely the mechanism discussed in terms of bargaining. And as a broad program of social reform, it is not only the reason lead to relative success of China’s reform, but also an endogenous process of political democratic society under eastern situation. Namely, if effort of the paper is right, we will prove the following main logical conclusion.First, the reform of bargaining is of efficiency. The relative economic principle is that bargaining "deal" with Pareto improvement of the efficiency "can improve the effectiveness of at least ones welfare level without reduction of other members of the society at the same time", and 30 years of China’s economic development practice is the demonstration.Second, the reform of bargaining has the nature of equality. This is given by the bargaining game itself in which the participants have to compromise from each other.Thirdly, the bargaining reform contains the essence of democratic politics, and it is an important way to real democracy that the logic of bargaining game contains the logic that confrontation is inevitable, but compromise is valuable. And it is the basic principles of bargaining theory which is not just different from the traditional adversarial and cooperative behavior, but also from political philosophy of vote on the simplified logic of democracy. To some extent, it fully reflected the nature of "rational dialogue "and "political civilization" of Human society. This means that China’s current reform practice, in essence, is an innovative concept of traditional democratic theory of political connotations.More generally, a key footnote to the democratic nature of contemporary China’s bargaining reform is the principles of "realistic" that Chinese Communist Party has always stood for, and try to adhere to. This means that the logic of it lies whether the reform process could adhere to the "realism", or say the only effective way likely to be "realistic" is whether all parties involved in the interests of reform can reach the equilibrium of the non-violent bargaining game.In comparison, the paper on the reform of China’s economy mechanism and its interpretation is not just trying to meet the reality of China’s reform, but also is of the appropriate and academic legitimacy of traditional thinkings. Different theories of traditional disputes on the reform progress of "radical" and "progressive" process is not the essential differences between them. In fact, the gradual reform is only a special equilibrium of bargaining reform; the core of it is that the bargaining mechanisms can accommodate stakeholder’s different objective demands. It is different from the traditional argument on the China’s reform theory as well as to clarify the theory about the misconceptions of China’s reform, and also it may provide a unified, legitimate theoretical basis.Put concretely, the first chapter of the paper will focus on giving a logical structure of the overall arrangement and the introduction. Second chapter, from the theory of China’s Reform Review, tries to answer "Why the core of China’s reform is a social process of bargaining". The third chapter tries to give a comprehensive exposition of the value of social science of the bargaining theory, and applied to the logic of legitimacy of reform. InⅣ, we will focus on the core, competitive equilibriulm, and the three solution concept of classical bargaining game, gives a textbook presentation. Chapter V will discuss the expression of the institution in terms of economic significance. The logical premise and conditions of the general reform of bargaining are discussed in ChapterⅥ. ChapterⅦwill discuss the situation in China under the concept of non-violent solution of bargaining and mathematical structure. InⅧ, we give the demonstration of the core model and two bargaining solution concept; ChapterⅨ, is based on the model of natural reasoning, will discuss the social scientific value of the institutional reform of China’s, including the concrete proof of the above three conclusions. In the tenth chapter, we will further discuss the logic of China’s reform involved the three main theoretical flaw. In end of the final chapterⅪ, we will try to focus on the reform of China in terms of bargaining logic, giving a naturalistic philosophy and methodology discussion.

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