Dynamic Evolution Game Analysis of Government and Enterprises’ Behavioural Strategies: Effect on Tax-Policy Life Cycle on Innovation.

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Bibliographic Details
Title:	Dynamic Evolution Game Analysis of Government and Enterprises’ Behavioural Strategies: Effect on Tax-Policy Life Cycle on Innovation.
Authors:	Xia, Hui¹ summertulip@cqut.edu.cn, Fang, Shanshan² 939555063@qq.com, Jiang, Qingwu² 2428944245@qq.com
Source:	IAENG International Journal of Applied Mathematics. Aug2026, Vol. 56 Issue 8, p3138-3165. 28p.
Subjects:	Fiscal policy, Technological innovations, Sustainable development, Profit maximization, Cooperation, Decision making
Abstract:	This study aims to resolve the contradiction between tax policy effects and excessive profit-seeking. Most existing studies assume tax policies have constant and permanent effects, overlooking the inherent life cycle of policies. To address this gap, we construct a government-enterprise evolutionary game model and introduce a survival function to characterize the tax policy life cycle, which is divided into three stages: newborn, growth, and maturity. Within this stage-based framework, we examine six evolutionary paths and classify them based on final outcomes and process characteristics into three typical types: the ideal type of precise matching; the problematic type of premature withdrawal and excessive embeddedness; and the adjustment type of lagged intervention, interrupted restart, and delayed rescue. These six paths exhaust all possible sequential combinations of the three stage-specific ESS cases, ensuring that no potential policy-enterprise interaction pattern is omitted. Based on this classification, we show how to resolve the contradiction between tax policy effects and excessive profit- seeking, thereby coordinating participants' interests. Cross-stage sensitivity tests show that: (i) policy timing mismatch is the root cause of failure; (ii) intrinsic motivation can avoid dependency; (iii) resilience is indispensable; (iv) policy parameters have an optimal range. Only the ideal type achieves both success and optimal resource allocation precisely because it synchronizes timing, intensity, and rhythm with the enterprise's stage of development. Specifically, policymakers should avoid over-intervention in the newborn stage, provide precise incentives in the growth stage, and exit timely in the maturity stage. The ideal type thus serves as a benchmark, the problematic type warns of mismatch risks, and the adjustment type offers room for error, importantly promoting dynamic government-enterprise coordination and sustainable innovation. [ABSTRACT FROM AUTHOR]
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Database:	Engineering Source

Description
Abstract:	This study aims to resolve the contradiction between tax policy effects and excessive profit-seeking. Most existing studies assume tax policies have constant and permanent effects, overlooking the inherent life cycle of policies. To address this gap, we construct a government-enterprise evolutionary game model and introduce a survival function to characterize the tax policy life cycle, which is divided into three stages: newborn, growth, and maturity. Within this stage-based framework, we examine six evolutionary paths and classify them based on final outcomes and process characteristics into three typical types: the ideal type of precise matching; the problematic type of premature withdrawal and excessive embeddedness; and the adjustment type of lagged intervention, interrupted restart, and delayed rescue. These six paths exhaust all possible sequential combinations of the three stage-specific ESS cases, ensuring that no potential policy-enterprise interaction pattern is omitted. Based on this classification, we show how to resolve the contradiction between tax policy effects and excessive profit- seeking, thereby coordinating participants' interests. Cross-stage sensitivity tests show that: (i) policy timing mismatch is the root cause of failure; (ii) intrinsic motivation can avoid dependency; (iii) resilience is indispensable; (iv) policy parameters have an optimal range. Only the ideal type achieves both success and optimal resource allocation precisely because it synchronizes timing, intensity, and rhythm with the enterprise's stage of development. Specifically, policymakers should avoid over-intervention in the newborn stage, provide precise incentives in the growth stage, and exit timely in the maturity stage. The ideal type thus serves as a benchmark, the problematic type warns of mismatch risks, and the adjustment type offers room for error, importantly promoting dynamic government-enterprise coordination and sustainable innovation. [ABSTRACT FROM AUTHOR]
ISSN:	19929978