Research on the Excess Capacity Root of State-owned Enterprises Based on the Theory of the Long Heavy Game

Abstract

At present, China's many industry serious overcapacity problems have the serious negative effect for China's economic and social development. The paper analysis the deep reason of severe overcapacity in the industry in China by using the repeated game theory, analysis the repeated game within a time limit is a simple repetition, static game cannot constitute a conspiracy; In dynamic situations of Bertrand game is more likely to result in collusion, which has the stronger competitive, is advantageous to the conspiracy of the enterprise, limited production, further improve the price, to ensure that the industry to obtain a reasonable profit. From the repeated game theory for a long time, the paper put forward that impossible to reach an agreement between state-owned enterprises competitive industries and collusion, overcapacity is inevitable. In the short term, in competitive industries, the state-owned enterprise leaders Ren Yongzhi should be carried out for an indefinite period; Long-term will further deepen the reform, state-owned capital should further from gradually withdraw from competitive industries, and gradually achieve privatization, build a long term basis and conditions of the repeated game between enterprises; At the same time, to promote the reform of government functions, to promote the reform of fiscal decentralization and performance appraisal system.