An Analysis on Rent-seeking Activities and Supervisions in Mining Lease Based on the Game Theory Approach

In mining lease in China, a bureau of geology and mineral resources may become a rent-seeking part and seek benefit from mineral investors. The investors may pay the rent to the bureau in order to obtain the mineral right and operate sustainable. To eliminate corruption and cut down loss of state assets, supervision departments perform their respective duties to avoid rent-seeking activities in mining lease. Based on the game theory, this paper establishes a rent-seeking model which involves three parts of participants include a supervision department, a bureau in charge and an investor, provides the expected profit functions and reaction functions of the three participants. By implementing the game model, it analyses the decisive factors of the rent-seeking activities and puts forward some countermeasures to prevent them. According to the conclusions of this paper, supervision departments should improve the efficiency of supervisions, cut down the cost of supervision and severely punish the rent-seeking activities.