Transformations  in
Business & Economics

THE RESEARCH OF SECURITY MARKET REGULATORY MECHANISM FROM THE PERSPECTIVE OF TRIPARTITE GAME
Peng Bi, Shengnian Wang

ABSTRACT. In view of the existence of financial fraud of listed companies in the securities market, the issue of how to improve the regulatory mechanism of the securities market is discussed. By constructing a game model between the "listed company-supervision department-accounting firm", this paper analyzes the selection and evolution of the main strategy of the tripartite game, and finally uses the Matlab tool to simulate the game model. The research shows that the financial fraud behavior of listed companies is not only driven by their own interests, but also affected by multiple factors such as the punishment of regulatory authorities, the success rate of supervision, and the willingness of the accounting firm to cooperate. On this basis, from the three perspectives of listed companies, accounting firms, and regulatory agencies, we proposed countermeasures to curb the financial fraud of listed companies.

KEYWORDS: security market, listed company, financial fraud, evolution game, tripartite subjects.

JEL classification: P20, Q12, Q19.