ABSTRACT
The production enterprise’s capacity overinvestment and governmental supervision failure often lead to overcapacity. The article builds an evolutionary game model between supervision agencies and production enterprises to explain the supervision fluctuation of overcapacity problem. The analytical solutions are found. Numerical examples are provided to illustrate the evolutionary game process with Dynamo and Matlab. In the long-run, the initial condition and the payoffs are two main factors determine the probability of failed supervision. Apart from single punishment measure, more effective measures need to be taken to address overcapacity efficiently.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 As to the choices of key parameter values in the numerical example, firstly, the parameter constraints need to be meet. Secondly, the parameter values of S, L, P, C and G are determined based on relevant supervision regulations and punishment case. Thirdly, the parameter values of A, E, and B are assigned by consulting experts and enterprise managers.