Comparative statics for rank-dependent expected utility theory

1991 ◽  
Vol 4 (4) ◽  
pp. 339-350 ◽  
Author(s):  
John Quiggin
2020 ◽  
Vol 12 (8) ◽  
pp. 3367 ◽  
Author(s):  
Kairong Hong ◽  
Yucheng Zou ◽  
Yanwei Zhang ◽  
Kaifeng Duan

During land expropriation, it is difficult to form a real antagonistic relationship between farmers and the local Government due to disparities, which means the confrontations between them are difficult to administer. The confrontation between both parties could lead to the distortion of the farmers’ resisting logic, who are supposed to be in a vulnerable position. Hence, the farmers are not necessarily in a weak position; sometimes, they even have advantages compared with the local governments. Through the combination of Quiggin’s rank-based expected utility theory and evolutionary game theory, this paper constructs a conflict-induced game mechanism Rank-Dependent Expected Utility Theory (RDEU) evolutionary game model and discusses the evolution law of strategic behavior of land-expropriated farmers and local governments under the influence of emotion. The software simulation results show that when the farmers at the weak side think that the probability of the government adopting the strong strategy is higher than a certain cut-off point, the farmers will use the weapon of the weak to release the signal that endangers the order and force the government to adopt a compromise strategy by utilizing authoritative preference for stability. Through the interaction of heterogeneous beliefs between farmers and the government, the game of land expropriation will form an evolutionary stable equilibrium.


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