Game Analysis Of Private Equity Investment

In the private equity investment, private equity fund becomes more and more popular among the finance enterprise because of its special investment and value-added service. multi-layer capital market construction opening to IPO from the law step by step, and the legalization of private equity fund, private equity fund has developed to such a large scale. However, there are still high risks in the private equity investment, especially the adverse selection problems and moral problems caused by the two sides’ asymmetric information.Till now, in China most of the research on the information asymmetry problem in investment and financing is one-way risk research. Few people focus on the double-way adverse selection problems and moral problems in the private equit y investment. The moral risk in the investment management is also a gambling between the single investment institution and the single financing institution. Along with the market development, however, invest cases of private equity syndicate investment gradually increased, so we need further analysis and discussion in the multiplayer game situations, in private equity investments.In this paper, an analysis is made for analyzing the double adverse selection problem in project selection stage by the establishing private equity signaling game model. First select the reverse problem of financing the enterprise from the start caused by asymmetric information, a complete analysis of the signaling model of separating equilibrium and pooling equilibrium, in complete information and incomplete information. And thus the model is based on analysis of the adverse selection problem faced by finance companies.In this paper, an analysis is made for analyzing the private equity invest ment fund and financing enterprises’ strategy in the expanding multi-side private equity investment gambling by the establishing non-cooperative game model. We can see that when the information is incomplete, there might be collusion behaviors treated by the player in a sluggish and free-riding way, which reduce the effort and increase the rate of Moral hazard problems. It is not easy to supervise the behaviors of investors even though the behaviors of the investor and financer can be constrained to some extent by reversing convertibles, syndicate investment or some other motivated activity. In this paper, I try to set up multi-sides cooperation game model based on the cooperation game model. Based on the new model and practical facts, I get the Shapley value of cooperation game. After researching the relationship of the Shapley value and core allocation, I find that Shapley value can meet individual rationality and Shapley value is a special case of core allocation under some odds assumption.Based on the analysis of this paper, considering the contract theory, real options thinking allocation strategy game Shapley value and cooperation, the establishment of private equity investment risk aversion dual mechanism, through the design of "Convertible Equity" supervise the behavior of investors, and Game Theory angle to verify its feasibility.