A Game-Theoretic Analysis of “Proposal, Review, Ex-post Assessment” Process of Special Zones System

Abstract

Special zones sysytem for structural reform is very effective system for the promotion of regulatory reform. However, the number of proposals and that of daring proposals have been decreasing. We point out that there are extemal effects among processes constituting the special zones system and these extemal effects are the causes of the decrease in proposals. We formulate the mechanism of the special zonse system as an incomplete information game. Through the model analysis, we investigate the impacts of the changing the process in the specail zones system.