The Analysis Of The Current Farm Finance By Game Theory

The analysis of the current farm finance by game theoryIn modern society, financial department is playing a significant role. Financial department has gradually become an information center of modern economic activities and a channel through which governments carry out their policy of macro economy. Although finance's development will benefit the GDP and individual living condition greatly, it is regretful that in many developing countries the development of financial department is always restrained, and that the mutual connection between finance and economy is also cut deliberately. In many developing countries, since the interest rate is reduced deliberately, there is a rationed credit. As a result of these governments' preference of dualism, countryside and traditional departments can not actually get these financial resources. Modern banks in cities and traditional usury coexist. Farm financial market goes backward. In the country, shortly supplied farm funds can not fully combine with the abundant land resources and labor resources to produce more wealth, all of that lead to the farming recession.The agricultural disadvantages in market economy lead to its high cost of circulating funds. Outside funds for country raised by government frequently flow out of country and are inefficient. This thesis believes that the cooperative financial groups not only resist the impact from fierce competition for market, but also overcome the inefficiency accompanied with the outside funds. Cooperative financial groups may efficiently pool inside funds to serve farmers themselves. The experience from many developed countries suggests that the cooperative economy would be efficient, even if in future we would have accomplished the market economy reform. Therefore, this thesis proposes that we should hold the country cooperative finance in long way and develop the real country cooperative financial groups. There are four parts in this thesis. The first part concisely introduces current farm finance theory and its evaluation criterion. The second part describes the present situation of Chinese farm finance. The third part, by game theory, analyses the present situation and way of farm finance as well settlements to deviation from Pareto optimality. The last part proposes to found the real country cooperative financial group, combined with cooperative theory and experience from developed countries, instead of present farm cooperative.