A Research Of The People’s Bank Of China’s Emergency Management Based On Dynamic Game Of Incomplete Information

Since the establishment of State Financial Emergency Contingency Plan in 2005, Chinese financial institutions have formulated corresponding contingency plans to cope with financial emergencies, building a theoretical system of the financial contingency structure in China. As an important component of the overall state emergency plan system for managing important public outbursts, People’s Bank of China has, through years of continuous exploration, gradually established an emergency contingency system in length and breadth.However, in a period of structural reform and system update, competitions in the finance industry are becoming sharper and financial products are going through fast innovations, complicating financial business environment, in which risks will be exposed more easily and financial emergencies will occur more possibly. Should these emergencies be dealt with improperly, financial risks would quickly spread throughout the whole financial business and even lead to a general financial risk. In the meantime, the emergency management process of People’s Bank of China presents features of dynamicness, bounded rationality and incomplete information. After the outburst, the state and even the nature of emergencies will change because of one or more factors, posing new challenges to People’s Bank of China in decision-making. Because of the features of dynamicness, bounded rationality and incomplete information in the emergency management process of People’s Bank of China, it’s far from enough to solve emergencies using static means adopted in the past. People’s Bank of China is responsible for analyzing the development process and derivative mechanism of emergencies, integrating all social resources to solve emergencies dynamically. As a result, there is a practical need to bring in dynamic game of incomplete information.This paper in the first place deeply analyzes the game relationship between emergency managing subjects, emergency managing objects and both subjects and objects in emergency management of People’s Bank of China, and explores the general game process of factors with incomplete information. Secondly, on the basis of game analysis and Perfect Bayesian Equilibrium, this paper proposes an expected utility theory that maximizes decision makers’ expected utility and an emergency managing model. These have pointed out key tasks and points in decision making of People’s Bank of China. Thirdly, this paper selectively analyzes problems and reasons existing in People’s Bank of China’s emergency management with the dynamic game of incomplete information, supplying a reference frame for case analysis. Following this, this paper, by taking People’s Bank of China’s management of "1.31 case" for empirical study and adopting dynamic game theory, verifies the feasibility and effectiveness of emergency managing decision-making model through collection of the event state information, repeated game playing and improvement of decision making. Finally, this paper suggests establishing a comprehensive database of emergencies, an efficient information management system and a department linkage mechanism, and changing from evaluating emergency plans to evaluating emergency capacity in order to the build emergency managing culture of People’s Bank of China.