Game analysis on the financing problem in small and medium-sized private enterprises under the condition of information asymmetry

In financing market, the information of operators and investors are often asymmetry. Signaling game is relatively simple and widely used, as a type of incomplete information dynamic game, which can clearly explain the financing process of small and medium-sized private enterprises. Therefore, contraposing to the information asymmetry existed in SMEs credit market, the corresponding signaling game is established and we also provide analysis on separating equilibrium, semi separating equilibrium and pooling equilibrium. The results demonstrate there are three possible equilibrium in SMEs credit market. The equilibrium characteristics depends on the whitewash cost of enterprises, and also on the conditions such as mortgage terms of banks for different types of enterprises, repayment probability as well as the probability of success of investment projects.