A Dynamic Network Game of the Fintech Industry

doi:10.1007/s40305-022-00434-4

Journal of the Operations Research Society of China ›› 2024, Vol. 12 ›› Issue (1): 5-33.doi: 10.1007/s40305-022-00434-4

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A Dynamic Network Game of the Fintech Industry

David W. K. Yeung^1,2,3, Leon A. Petrosyan⁴, Ying-Xuan Zhang¹

1. SRS Consortium for Advanced Study in Cooperative Dynamic Games, Shue Yan University, Hong Kong, China;
2. Center of Game Theory, St Petersburg State University, Saint Petersburg, Russia;
3. Department of Finance, Asia University, Taichung City, Taiwan, China;
4. Faculty of Applied Mathematics-Control Processes and Center of Game Theory, St Petersburg State University, Saint Petersburg, Russia

Received:2022-03-02 Revised:2022-07-06 Online:2024-03-30 Published:2024-03-13
Contact: David W. K. Yeung, Leon A. Petrosyan, Ying-Xuan Zhang E-mail:dwkyeung@hksyu.edu;l.petrosyan@spbu.ru;yxzhang@hksyu.edu
Supported by:
The authors would like to thank two anonymous reviewers whose excellent sugges458tions improve the paper significantly.

Abstract

Abstract: Economies of scale, economies of scope, and technology spillover are decisive economic elements that are crucial to the development in the Fintech industry. These positive externalities are often realized through network links. In this paper, we present a dynamic network of financial firms which exhibits these decisive elements. The network game equilibria are characterized. A Pareto efficient solution involving collaboration of all firms is provided. To obtain a fair-share distribution of cooperative gains, the Shapley value is adopted as the sharing mechanism. Payoff distribution mechanisms which guarantee the fulfilment of the Shapley value distribution in each stage of the cooperation duration are derived.

Key words: Network game, Network equilibria, Shapley value, Pareto efficient cooperation

CLC Number:

David W. K. Yeung, Leon A. Petrosyan, Ying-Xuan Zhang. A Dynamic Network Game of the Fintech Industry[J]. Journal of the Operations Research Society of China, 2024, 12(1): 5-33.

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References

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A Dynamic Network Game of the Fintech Industry

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