Research on ethics games between the MNEs and Chinese government

To explain the games, some assumptions must be introduced, namely,

1. That the MNEs and Chinese government in the ethics games are absolutely rational.

2. That uncertainties remain in both parties, in other words, the MNEs have no idea whether China has a regulatory government based on law or an ethics-restrained one. It is a common knowledge that the probability of Chinese government belongs to the former type is α.