Stability Analysis of the Credit Market in Supply Chain Finance Based on Stochastic Evolutionary Game Theory

Chunsheng Wang, Jiatong Weng, Jingshi He (), Xiaopin Wang, Hong Ding and Quanxin Zhu ()
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Chunsheng Wang: Digital Economy and Management School, Software Engineering Institute of Guangzhou, Guangzhou 510990, China
Jiatong Weng: Faculty of Business, Lingnan University, Hong Kong 999077, China
Jingshi He: Faculty of Finance, City University of Macau, Macau 999078, China
Xiaopin Wang: Department of Electronics, Software Engineering Institute of Guangzhou, Guangzhou 510990, China
Hong Ding: Digital Economy and Management School, Software Engineering Institute of Guangzhou, Guangzhou 510990, China
Quanxin Zhu: School of Mathematics and Statistics, Hunan Normal University, Changsha 410081, China

Mathematics, 2024, vol. 12, issue 11, 1-16

Abstract: The rapid development of supply chain finance (SCF) has significantly alleviated the financing difficulties of small and medium-sized enterprises (SMEs). However, it is important to recognize that within the accounts receivable financing segment of the SCF credit market, the credit risk associated with SMEs poses a serious challenge and potential threat to the stability, health, and sustainable development of the SCF system. This paper pays special attention to the stability of the two-party evolutionary game between SMEs and financial institutions (FIs) within the context of the Chinese SCF credit market. To identify a pathway to reduce credit risks for SMEs while simultaneously enhancing system stability, this paper adopts the stochastic evolutionary game (SEG) model and combines the fixed-point method to determine the conditions that satisfy the stability of the system’s index p mean square of the system. This study has made attempts in various aspects, such as the innovative construction and investigation of a nonlinear SEG model, the endeavor to study the stability of SEG systems using fixed-point methods, and the innovative construction of a more realistic two-player SEG system. The data and simulation results generated from hypothetical scenarios show that the conclusions of the article are credible and feasible. Through the study, we conclude that the higher credit ratio from FI and the higher penalty intensity from core enterprises (CEs) will accelerate the stability of the system. Based on solid data and modeling analysis, insights into the regulation of FI are provided.

Keywords: stochastic evolutionary game; credit market of supply chain finance; p -exponential stability in the mean square; fixed-point method (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
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