Research on the Economic Disputes and Countermeasures for House

Expropriation Combined Information Processing Model

Caixia Zuo, Shuangping Cao

, Yan Zheng

and Jing Yang

Chongqing College of Architecture and Technology Chongqing, China

Keywords: Expropriation of Houses, Economic Dispute, Information Processing Model, Countermeasures.

Abstract: With the rapid development of urbanization in China, more expropriation of houses occurs, which is giving

rise to much more contradictions and economic disputes. In the situation, lots of problems need to be solved.

Based on the previous researches, this paper analyzes the economic disputes and explores the reasons between

the expropriators and those who have been expropriated from their houses by means of comparison, graph

and Nash bargaining model,then proposes corresponding countermeasures to ensure that the expropriation

can be implemented smoothly.

1 INTRODUCTION

In recent years, with the sustained economic

development in China, the core position of the city is

increasingly enhanced in the regional economy

development, and the city size is expanding

constantly. Kinds of city planning projects can be

seen everywhere, such as old city reconstruction,

commercial development and major government

projects. the amount of expropriation and the newly

completed area in China.

Figure 1: The amount of the newly completed area in China.

As can be seen from Figure 1, there has been a

great deal of development in urbanization and

industrialization in China. Under the circumstances

of rapid urbanization, it’s imperative to expand the

scope of urbanization and make use of land more

intensively and efficiently in the conditions of limited

resources, which has resulted in a large number of

housing levy activities (Peng 2009). During the

development and transformation in city, as a job

destroying the old and establishing the new, the

housing levy makes significant sense to improve the

production and living environment of the residents,

furthermore, it promotes the development of city and

regional economy development. Nevertheless,

housing expropriation concerns the interests of the

expropriators and those to be levied, which is likely

to induce sharp conflicts and affect social stability

with a slight error. Lately, contradictories caused by

expropriation happen frequently and attract

widespread attention in society, which makes it

necessary to take measures to deal with interests of

relative departments and to prevent and solve various

disputes.

In order to avoid conflicts in expropriation, the

government has taken legal corresponding

countermeasures, and the provisions in the laws are

increasingly humanistic. Table 1 illustrates some of

the laws and regulations issued concerning

expropriation and compensation in China (Shan

2012).

Zuo, C., Cao, S., Zheng, Y. and Yang, J.

Research on the Economic Disputes and Countermeasures for House Expropriation Combined Information Processing Model.

DOI: 10.5220/0011157900003440

In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 77-81

ISBN: 978-989-758-593-7

Table 1: Laws and Regulations.

Implementation

Time

Laws and Regulations

2007 Property Law of the PRC

2011

The assessment methods of the

housing levy on the state-owned

land

2012

Provisions on handling a

number of issues in applying to the

people 's court for enforcement of

the case of the housing levy

compensation on the state-owned

land

2020

The housing levy and

compensation ordinance on the

state-owned land

In addition, some domestic scholars have

conducted researches concerning expropriation of

houses, the majority of which mainly study from the

theoretical level like news reports, while literatures in

deeper levels are relatively less. This paper applies

Game theory to analyze the issue and puts forward

corresponding advises based on the analyzed results.

2 LEVIED DISPUTES AND

CAUSES

2.1 The Economic Disputes

The contradictory between the individuals to be

levied and the expropriators playing an important role

in expropriation, is the most prominent in all disputes,

and the impact resulted from it is profound, and even

affect social harmonious and stability (Qiu 2021).

Disputes mainly come from the two sides attempting

to maximize their own benefit through the game

which threatens other’s interests. The individuals to

be levied seek to get excess interests, while the

expropriator hopes to reach the goal with the least

cost.

2.2 Causes Analysis

2.2.1 The Narrow Scope of Compensation

The ordinance provides the scope of expropriation

compensation in China, furthermore, the author

collects compensation information about some

foreign countries. Table 2 lists the compensation

range in several countries (Song 2019).

Table 2: Compensation Range.

Country Range

China

Value of houses, temporary settling-

fees, moving and relocating cost,

compensation for suspension of

production or business

Germany

Value of houses, temporary settling-

fee, cost for rights, operating loss, scrap

value of land, moving cost, cost for

lawyer or experts, hardship grants

Japan

Value of houses, temporary settling-

fee, operating loss, scrap value of land,

moving cost, engineering cost

Canada

Value of houses, temporary settling-

fee, operating loss, market value of land,

loss caused by disturbance, mortgage of

land

Compared with other countries in Table II, the

compensation scope in China, which doesn’t take the

potential loss into consideration, is relatively narrow.

As a consequent, some individuals are not satisfied

with the compensation standards.

2.2.2 Lacking of Participation Echanism for

the Subjects to Be Expropriated

The 10th provision in Ordinance stipulates that: “the

government should conduct feasibility studies on the

compensation scheme and consults with the public,

so as to solicit their opinions, furthermore, the

consultation period is not less than 30 days.”

However, in the actual process, hearings are scarcely

organized, giving rise to low transparent information

about expropriation (Gui 2011). The individuals

know little about levy information in the decision-

making process, such as the levy purpose and

decision-making of the plan as well as compensation

for the price, which causes that the folks’rights to

information and dissent is difficult to be achieved. As

a consequence, the phenomenon that the people

suspect of the compensation and refuse to sign up the

levy agreement generates.

2.2.3 Unreasonable Charge of

Compensation

Lately, with human rights and private rights of

property gradually paid attention, expropriation

becomes one of the most difficult problems that

should be solved. However, in order to get excessive

benefit, some subjects being expropriated boycott

expropriation maliciously, like asking for exorbitant

prices, which leads expropriation can’t proceed

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smoothly and affects development progress (Xin

2021).

3 ANALYZE OF SUBJECT

BEHAVIOR SUPPORTED ON

INFORMATION PROCESSING

MODEL

In expropriation, the game exists between the

government and the subjects being expropriated. The

expropriator always pursues to achieve requisition

land quickly and smoothly, meanwhile, keeping the

society peace, while the land ownerships expect more

benefit with the least loss. Furthermore, in the whole

procedure, the department who has access to

information, masters the messages concerning

expropriation abundantly, while the land ownerships

are underdogs. Under this circumstance, in fact, the

game of behavior is one of benefits for the subjects in

the asymmetric information instances (Wang 2010).

3.1 Several Hypothesis and

Information Processing Model

There are two types for the expropriator’s behavior in

expropriation: reasonable compensation and

unreasonable compensation. The land ownership’s

performance divides into two types: cooperation and

boycott. In the end, there are five different choices for

the behavior: (reasonable compensation,

cooperation), (reasonable compensation, successful

boycott), (reasonable compensation, unsuccessful

boycott), (unreasonable compensation, cooperation),

(unreasonable compensation, successful boycott),

(unreasonable compensation, unsuccessful boycott).

Given the hypothesis, the unreasonable

compensation price provided by the government is

()

0PP>

, and the reasonable compensation price is

()

0PP

′′

()

0PP>

, while the land ownerships expect

the price is .The probability that the expropriator

gives the low allowance is

, and if the beings

expropriated resist it, the cost that the expropriator

takes measures is

, and the gain of expropriation is

()

0LL>

. However, once the unreasonable

compensation is founded by high authorities. The

gain and n times of it will be as the penalty. Besides,

the probability for the land ownerships’boycott and

the successful boycott is

and

, meanwhile, the cost

it takes is

According to above hypothesis, the benefit matrix

can be drawn as Table 3.

Table 3: Benefit matrix.

Land

ownerships

the

riato

Successful

boycott

()

Unsuccessf

ul boycott

((1 ))

−

Cooper

ation

(1 )

−

Unreasonable

compensation

())

PPC

′

−−

10 2

())

PPC

−−

−

)

−

Reasonable

compensation

)

PPC

′

−−

−

(,)CC−−

(0,0)

Note: the game compute the benefit of each department

through making (reasonable compensation, cooperation) as

the datum mark.

3.2 Solution of the Model

Under the condition that the probability of the land

expropriated resisting the expropriation is

, the

expected revenue that the expropriator gets through

reasonable and unreasonable compensation

respectively is respectively as follow.

02 102

02 2

() ( ) (1 ) ( )

(1 ) ( ) (1 ) (1 )

PPC PPC

PPC C

λθβ θ β

θβ θ β

′

=×× − − +×− × − −

′

+− ×× − − −− × − ×

(1)

(1 ) ( )

λθ

−=×−

(2)

When there is no difference between reasonable

compensation and unreasonable compensation,

namely

() (1 )EE

λλ

=−

, so the solution can be got.

()

PP C

×−−

×−

(3)

When the probability of unreasonable

compensation surpasses

, the optimal choice for the

land ownership is cooperation, on the contrary, the

optimal choice is rejection. When the probability of

unreasonable compensation is

, the expected

revenue that the land ownerships get through boycott

and cooperation is respectively as follows.

[

]

111

() ( ) (1 ) ( )

(1 ) ( )

ELCLC

θλ βμ β

=×−××− +−×− +

−× −

(4)

102

(1 ) ( )

EPPC

θλβ

λβ

′

−=×× −− +

×− ×−

(5)

When there is no difference between boycott and

cooperation, that is to say

() (1 )EE

θθ

=−

, so the

solution could be got.

()

02 1

1-- -

PC LC

βββμ

+× × +××

(6)

When the probability of boycott surpasses

, the

optimal choice for the beings expropriated is

Research on the Economic Disputes and Countermeasures for House Expropriation Combined Information Processing Model

unreasonable compensation, on the contrary, the

optimal choice is reasonable compensation. While the

probability of unreasonable compensation is

,namely the probability of reasonable compensation

−

. Figure.2 gives the optimal reaction function

of the land ownerships, namely the optimal point of

(equilibrium point)N

(cooperation)

(boycott)

(cooperation)

(boycott)

reasonable

compensation

reasonable

compensation

unreasonable

compensation

unreasonable

compensation

Figure2: The mixed strategy.

Form the Figure 2, the intersection point is the

point of Nash equilibrium in the game. The analyzed

outcome is as follows.

The following result can be obtained

()

PP C

×−−

×−

(7)

Behavior of the expropriator is concerned with the

probability of successful boycott

, the cost of

boycott

, the unreasonable compensation

,the

reasonable compensation

and the required

allowance of the house owners

′

. When the higher

imposed boycott cost and require compensation

amount, meaning that the stronger attitudes boycott

imposes, the smaller the possibility of collecting

departments to take unreasonable compensation.

3.2.1 According to the Following Equation

()

02 1

1-- -

PC LC

βββμ

+× × +××

(8)

Levied countered behavior is related with punishment

imposed by behavior of collection department

,unreasonable compensation amount

and other

relevant factors. When collecting departments fear of

severe punishment, namely

is large, the possibility

of unreasonable compensation reduces, which means

that probability of taking boycotts decreases, namely

reduces. Considered when the greater the

unreasonable compensation amount is, the wider the

range is, the smaller the molecule is in the formula,

so the smaller

is, meaning that the smaller will the

impossibility of the house owners imposed to take

boycotts.

4 DISPUTES SOLUTIONS

4.1 Expanding the Scope of

Compensation for Expropriation

What can be drawn based on the results of the above

model, in order to reduce disputes in the housing levy

process, the scope of compensation for expropriation

should be appropriate to expand, that is,

increases,

so that the interests of the people could be subject to

further protection, thereby reducing the possibility of

taking boycott. Expanding the scope of compensation

for expropriation follows two cases.

4.1.1 The Housing Levy Compensation Need

to Consider Special families

In housing expropriation process, it is usual for the

expropriators to encounter the household staff and

complex family relationships, for these cases, the

compensation standard is no longer applicable (Peng

2010). Housing expropriation departments can

understand the actual situation of the special families

through family visits and gather information, at last,

develop a mutually satisfactory special compensation

program in consultation with the requisitioned

owners, without violating levied laws.

4.1.2 Compensating for the Price Expected

to Rise as Well as Intangible Benefits

Accompanied in the process of urban transformation,

real estate industry is rapidly developed in China, and

the price increase is also increasing. The 19th article

in the Ordinance says: The compensation of the value

of the houses shall not be less than market prices of

similar real estate since the decision of housing levy

is announced to the public, which dose not consider

the rise of prices of housed to be levied. Therefore, in

the valuation of expropriated houses, its future price

appreciation should also be taken into consideration,

thus expanding the scope of compensation for

expropriation. Additionally housing levy process also

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involves the compensation of intangible benefits.

When living in the same place for a long time, people

are more familiar with the living environment like

transport, entertainment facilities and the neighbors’

feelings (Zhang 2011). Once the houses are levied,

they are placed into a strange place, and the new

environment is likely to affect all aspects of their

social interaction, medical care, children's education,

entertainment, which are related to the pros and cons

of the intangible benefits. However, the

compensation provisions for intangible benefits lack

of a certain computing standards, which makes it

difficult to determine the specific amount of

compensation. So compensation for intangible

benefits need to be decided through mutual

consultations.

4.1.3 Perfecting the Levied Participatory

Mechanisms

In the actual collection process, in order to reduce the

occurrence of disputes, the implementation of the

legislative hearing system can make the legislative

process more open and transparent (Zhou 2021). At

the hearing, representative figures elected by the

public take participation in the hearing, and make

statements about the views on behalf of the public,

which makes the legislative process more adopt the

viewpoints of the public, and to some extent increase

the involvement of the public, so that the formulation

of the law is more concerned about the coordination

of the interests of all parties, thus reducing the

possibility of expropriation disputes.

5 CONCLUSIONS

Since expropriation involves multi-stakeholders,

rational and humane method should be used to

actively deal with the various disputes in the

collection process. It is necessary to protect the

legitimate rights and interests of the people to be

levied, but also to ensure binding of the levy

regulations. The paper explores the behavior that may

be taken under different conditions in the collection

process through the analysis of the disputes between

the people and their causes and building the game

model. According to the analysis results, it puts

forward appropriate countermeasures on how to

resolve the disputes, so as to provide some valid

suggestions to ensure the collection process more

smoothly.

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Research on the Economic Disputes and Countermeasures for House Expropriation Combined Information Processing Model