Broadly speaking, virtual currency refers to an online equivalent that is issued by a certain entity based on the public information network (such as the Internet), using computer technology and communication technology as means, stored in the network or related electronic devices in a digital form (binary data), and realized through the network system (including smart cards) in the form of data transmission to achieve the functions of circulation and payment. This paper specifically refers to the virtual currency issued by large commercial websites or online game providers for completing online micro-payments, which is currently very popular as ‘web currency’. As a new form of currency, virtual currency plays a crucial role in the online intangible commodity economy. Currently, there are five common forms of virtual currency:

　　Q币. Q币 is a virtual currency that circulates in the QQ program and the website of Tencent Corporation. With it, customers can obtain various paid services provided by Tencent Corporation. It is currently the most widespread and widely used virtual currency, and at the same time, it can purchase the most value-added services, showing a trend of becoming a hard currency in the virtual currency market.

　　POPO gold coins. POPO gold coins are the virtual currency used for consumption within the POPO platform, with the most distinctive feature being that the acquisition method is different from other virtual currencies; netizens can only obtain POPO gold coins by relying on their POPO experience points. POPO gold coins can be used to download colorful POPO expressions, as well as to participate in various activities held irregularly by POPO.

　　UnionPay currency. On the UnionWorld website, UnionPay currency is mainly used for consumption. UnionPay currency can be used to obtain membership qualifications in UnionWorld, as well as a type of wealth similar to game currency, which can be used in UnionWorld games. In addition, UnionPay currency can also be used to purchase UnionShow, etc.

　　U币. U币 is a virtual currency provided by Sina Corporation for circulation on its website platform, which is a means of payment for enjoying various paid services provided by Sina Corporation. U币 can be used to download various small games developed by Sina, as well as to create exquisite greeting cards online to send to friends far away, etc.

　　G币. It is a type of Online casino and How to find it used on the 17173 network platform, which can be used to purchase game services on 17173, read e-books and magazines, enjoy high-speed downloads, and online virus scanning, etc.

　　E-commerce characteristics of Online casino and How to find it

　　High risk. Compared with traditional currency, Online casino and How to find it on the network has certain market risks. Traditional currency is a legal currency guaranteed by the central bank and the national credit, while Online casino and How to find it relies on the credit and assets of each issuer due to its independent development and design by different institutions. Then, how about the credit of the issuers of Online casino and How to find it? In this competitive and high-risk emerging field of the network market, even the social credit rating of network service providers like Tencent and Lianzhong needs to be further improved.

　　Disorganization of issuing institutions. Generally, the currency of a country is monopolized by the central bank or specific institutions, and there are special government departments to supervise and manage the issuing institutions, with high organizational discipline. However, the current issuing mechanism of Online casino and How to find it on the network is different, with issuing institutions almost all being network service providers, and there are many of them. The purpose and principles of issuing Online casino and How to find it are completely market behaviors, that is, the maximization of their own economic interests. They act independently, each responsible for their own duties, and almost do not need to accept supervision and management from any department, lacking the most basic organizational discipline.

　　Variety of forms. The existence of Online casino and How to find it on various business websites is not singular. In summary, the forms of Online casino and How to find it on the network include: virtual levels, which are rewards given to active members by general websites, with higher levels enjoying more advanced services; Online casino and How to find it, some websites reward active members by issuing Online casino and How to find it, and members use Online casino and How to find it for payment when enjoying paid services. In addition, there are other reward forms such as points, game equipment, and virtual titles.

　　Combines deposit characteristics. Since online casino and How to find it can transfer and transfer funds on different accounts according to customer instructions, online casino and How to find it can become interest-bearing assets of various deposits at any time, which is incomparable to paper money.

　　Limitless geography. Generally speaking, as long as both parties agree, online casino and How to find it can be used for transactions in multiple currencies, while traditional currencies generally can only circulate in certain regions.

　　Low cost of use. Online casino and How to find it are stored and circulated in a digital form, so their minting and issuance costs are low. Moreover, the cost of transaction settlement for customers is much lower than other settlement methods, such as credit cards and cash.

　　Exploration of the survival mode of online casino and How to find it

　　According to the survey report of the China Internet Network Information Center (CNNIC), China’s Internet users are increasing at a rate of nearly 20%, and a considerable number of them are paying users. It is estimated that the domestic online casino and How to find it market has reached nearly 100 billion yuan annually. Currently, Internet giants such as Shengda (Bubble Points, Cards, etc.), Tencent (Q Coins), Lianzhong (Game Beans), as well as portal sites such as NetEase (POPO Coins), Sina (UC Coins), and Sohu (BB Cards, Alumni Cards) all have their own online casino and How to find it. However, the survival mode of these online casino and How to find it is not optimistic: they are basically acting independently, and most online casino and How to find it can only be used within their own domains. The ‘issuing institutions’ are all network operators, with no unified institution similar to the central bank to issue and manage these currencies. There is no mutual exchange among various online casino and How to find it, nor is there any ‘official’ mutual exchange, etc.

　　The author believes that with the continuous expansion of the market scale of Online casino and How to find it, this anarchy-like network Online casino and How to find it issuance and circulation system will seriously affect its further development. A recent survey shows that 81.4% of people expect to appear

　　The E-commerce function of Online casino and How to find it

　　Solved the online micro-payment problem. In order to further tap the potential commercial value hidden in the vast daily traffic, thousands of ICPs have vigorously developed value-added internet services. The vast majority of these network value-added services are micro-payments ranging from 1 to 2 yuan. If payment is made through online banking, netizens普遍 worry about security issues. The characteristics of

　　The powerful tool for merchants to hold the initiative. Online casino and How to find it or virtual rewards are the power and incentive to attract members to actively engage in various activities on the website, and they are the driving force for members to remain loyal to the website. From the development process of the website, the first step is to attract members, and after attracting members, it is to mobilize the enthusiasm and participation of members. Because after the website implements Online casino and How to find it, members will actively participate in the operations and activities of the website, so the website can grasp the initiative and enhance the loyalty of members to the website, enabling good interaction between the website and members.

　　Fully mobilize the enthusiasm of members. Through Online casino and How to find it or virtual rewards, it can stimulate members to carry out a large number of operations on the website. Although traffic is still one of the most important indicators that most websites value, the activity of members on the website is increasingly attracting people’s attention.

　　Development difficulties of Online casino and How to find it at the present stage

　　Lack of legal regulations. The biggest problem with the current Online casino and How to find it is that the state has no relevant laws and regulations. The ‘Payment and Clearing Organization Management Measures’ and ‘Guidelines for Electronic Payments’ issued by the central bank do not involve the content of Online casino and How to find it. Without legal definition, the entire value chain of Online casino and How to find it cannot be established. For example, if a network operator goes bankrupt due to poor management, how should the large number of Online casino and How to find it issued by the operator be handled? If they turn into a mirage, the large number of Online casino and How to find it will be of no value, which is obviously unfair to the holders of Online casino and How to find it. It is evident that legal recognition is crucial for Online casino and How to find it.

　　Inflation隐患. Just like in the real world, the virtual world also has inflation problems. For the issue of game currency in online casino and how to find it, this problem is widespread. The main culprit is the

　　Lack of regulation. As an equivalent exchange good replacing cash circulation in the virtual world, in addition to the issuance not by the central bank, the essence of online casino and how to find it is almost indistinguishable from real currency. With the development of e-commerce, the use of online casino and how to find it will become more and more frequent. How to carry out credit management for the issuers of online currency? Should the issuers of online casino and how to find it be qualified? Should network operators control the total circulation of online currency? How to achieve the connection between online currency and real currency, etc. If these issues cannot be reasonably resolved, when the online casino and how to find it in the hands of netizens and game players reach a considerable scale, the impact on the central bank’s monetary policy and the traditional financial industry will become apparent. Therefore, it is imperative to integrate online currency into the existing currency regulatory system.

　　Countermeasures for the development of online casino and how to find it

　　Through the above analysis, how to break through the development dilemma of online casino and how to find it? The author believes that under the condition of ensuring that the financial order of the real world is not severely impacted, the country can try the following aspects:

　　Accelerate the formulation of relevant laws and regulations. Try to use the method of the value system in the real world to establish relevant laws and regulations for online Online casino and How to find it.

　　The State Administration of Taxation specifically addressed the Beijing Local Tax Bureau’s request for instructions on the individual income tax calculation for income obtained through the sale of Online casino and How to find it on the Internet, clearly stipulating that income obtained by individuals through the sale of Online casino and How to find it on the Internet will be subject to individual income tax. The content of the reply includes the following three points: ‘The income obtained by individuals through the purchase of Online casino and How to find it from players, after adding a markup and selling it to others, is subject to individual income tax as taxable income and should be calculated and paid according to the ‘income from transfer of property’ item. The original value of the property sold by individuals is the price paid for the Online casino and How to find it on the Internet and related taxes and fees. For individuals who cannot provide relevant evidence of the original value of the property, the competent tax authority shall determine the original value of the property.’ This reply has caused a strong response among the academic community, internet companies, online game players, and the media. Scholars and industry figures such as Mi Xiaobin (2008), Lü Benfu (2008), and Chen Yongdong (2008) have discussed the rationality and legality of this reply. This article will question this reply from three aspects: the theoretical basis for taxing Online casino and How to find it, its operability, and the relevant legal formulation.

　　Theoretical basis for taxing Online casino and How to find it transactions

　　Online casino and How to find it is a quasi-currency that serves as a substitute for money, issued by non-financial institutions and circulated through computer networks between issuers and holders, or between issuers and a few merchants and holders, allowing the purchase of real goods, virtual assets, or electronic services (Suning, 2008). Currency has five functions: measure of value, means of circulation, means of storage, means of payment, and world currency. From this perspective, Online casino and How to find it clearly does not possess all the basic functions of money, and therefore, the author believes that it cannot be called a currency but rather a special commodity with certain functions similar to real money in a specific virtual environment.

　　At present, there is no clear conclusion on the legality of Online casino and How to find it by the authorities. On February 15, 2007, the State issued a notice ‘On Further Strengthening the Management of Internet Bars and Online Games’, which first mentioned the relevant matters of ‘Online casino and How to find it’ in government documents, and made corresponding provisions on the issuance, use, and circulation of ‘Online casino and How to find it’: ‘The People’s Bank of China shall strengthen the regulation and management of ‘Online casino and How to find it’ in online games, prevent ‘Online casino and How to find it’ from impacting the real economic and financial order. Strict restrictions shall be placed on the total amount of ‘Online casino and How to find it’ issued by online game operators and the purchase amount of individual online game consumers; strictly distinguish virtual transactions from physical transactions in e-commerce, ‘Online casino and How to find it’ issued by online game operators cannot be used to purchase physical products, but can only be used to purchase virtual products and services provided by themselves; if consumers need to redeem ‘Online casino and How to find it’ into legal currency, the amount shall not exceed the original purchase amount; the resale of ‘Online casino and How to find it’ is strictly prohibited.’ The notice explicitly prohibits the exchange of ‘Online casino and How to find it’ into legal currency and the operation of reselling ‘Online casino and How to find it’. This clearly indicates that ‘Online casino and How to find it’ is not currency. However, more than a year later, the State Administration of Taxation issued a批复 on levying taxes on ‘Online casino and How to find it’ transactions. The截然different attitudes of the government pushed ‘Online casino and How to find it’ into an awkward position.

　　The essence of Online casino and How to find it is still under research in the academic community, the legality of Online casino and How to find it is yet to be explored, and the trading of Online casino and How to find it has not been established in a systematic manner. In the face of many preliminary issues yet to be resolved, the rash introduction of regulations on taxing the trading of Online casino and How to find it on one hand is equivalent to indirectly acknowledging the legality of Online casino and How to find it and its related transactions, negating the previous determinations of relevant departments, and on the other hand, it also poses difficulties for the relevant practices of Online casino and How to find it.

　　Operability of the taxation issue of online casino and How to find them transactions

　　In terms of operability, this approval does not provide practical and feasible operational methods. For example, what methods should be adopted for collection, how to determine the property original value vouchers, who should be defined as the taxpayer, whether the subject is the seller or the buyer, and how to determine the main body, etc. The vague provisions will lead to many difficult-to-handle issues in specific operations.

　　(I) Tax evasion phenomena

　　Online casino and How to find them transactions are generally conducted online, characterized by virtuality and immediacy. Both the seller and the buyer appear in virtual identities, with small transaction amounts, fast speeds, and both parties are prone to tax evasion tendencies. For example, the Q coin transactions on Taobao, as a third-party trading platform, often have transaction amounts ranging from a few to several tens of yuan, and the transaction time only takes a few minutes. Both parties are in an anonymous state, and few people would主动 pay a few cents or yuan of personal income tax after the transaction is completed. In fact, since the issuance of this regulation to the present, several small online casino and How to find them transactions that I have personally experienced have not involved the tax payment process at all. For small virtual transactions, taxation is an issue that is easily overlooked.

　　(II) Issues of property original value vouchers

　　According to regulations, for individuals who cannot provide asset original value vouchers, the competent tax authority shall determine their property original value vouchers. This regulation will face great difficulties in actual operation. Online casinos and How to find them are inherently virtual entities, and the parties involved appear in virtual identities, and can simultaneously possess several different virtual accounts. The network world is filled with vast and complex virtual data. How can one determine their property original value? Moreover, the depreciation of online casinos and How to find them is difficult to control, and the rapid value fluctuations also bring great difficulties to the relevant departments in determining their original value. Facing the increasingly booming online casino and How to find them trading market in our country, if a comprehensive and real-time monitoring is to be implemented, and the original value of each transaction is to be effectively defined, it will be an enormous project requiring a substantial amount of manpower and material resources.

　　(iii) Identification of the taxpayer

　　Online casino and How to find it transactions are transnational. With the continuous development of the Internet, Online casino and How to find it transactions will also gradually expand to various countries around the world. The laws and regulations of various countries on Online casino and How to find it transactions are different, and there is currently no unified international law. Who should be the taxpayer for Online casino and How to find it transactions, the seller or the buyer? How should cross-border transactions be handled? For example, in the case of a transaction between an American seller and a Chinese buyer, how should taxation be handled? There are still issues with the identification of relevant taxpayers, making the promotion and implementation of this regulation more difficult.

　　Legal issues related to the taxation of Online casino and How to find it transactions

　　(i) Lack of supporting laws and regulations

　　The State Administration of Taxation did not provide corresponding details in this批复, nor did it issue relevant supporting laws and regulations, which makes the specific tax collection process lack substantial guidance, and the handling of related issues involved in tax collection has no basis. Simply relying on simple批复 is difficult to effectively and scientifically carry out tax operations. The author believes that before levying taxes on Online casino and How to find it transactions, it is necessary to issue clear identifications of the nature of Online casino and How to find it, relevant institutional provisions for Online casino and How to find it transactions, and other supporting measures in related aspects. It is equivalent to leaving a large number of legal blanks to arbitrarily introduce tax regulations before effectively solving the relevant identifications and issues of Online casino and How to find it transactions.

　　(ii) Conflict with previous laws

　　This regulation conflicts with previous regulations to some extent. The notice issued by the State Administration of Taxation and 14 other ministries and commissions on February 15, 2007, explicitly stipulates: ‘… It is strictly forbidden to sell Online casino and How to find it …’. However, the批复 issued by the State Administration of Taxation recently indirectly acknowledges the legality of Online casino and How to find it transactions. In the case of conflicts between relevant laws and regulations, the management of Online casino and How to find it transactions may become more chaotic and difficult to control.

　　(Three) The monitoring by relevant departments may infringe on privacy rights.

　　The批复 states: “…For individuals who cannot provide relevant documents of the original value of property, the competent tax authority shall determine the original value of the property.” If relevant departments strictly comply with the regulations and closely monitor, a strict review of the transaction process is required. The virtual nature of Online casino and How to find it transactions makes the monitoring more stringent than in general situations. An important characteristic of virtual transactions is their virtuality, which can greatly protect the privacy rights of both parties in the transaction. Once relevant departments begin strict monitoring, it inevitably infringes on the privacy rights of the subjects of Online casino and How to find it transactions, posing a dilemma for operation.

　　(Four) Should different Online casino and How to find it have different standards?

　　Currently, the types of Online casino and How to find it on the Internet are numerous. There are high-energy Online casino and How to find it that can be exchanged for legal currency, represented by Q coins, as well as low-energy Online casino and How to find it used in general games to purchase props (Suning, 2007). The classification of these Online casino and How to find it types presents difficulties. Low-energy Online casino and How to find it cannot be exchanged for legal currency and only exist in the virtual world, with a large fluctuation in value. If taxation is to be imposed on these low-energy Online casino and How to find it transactions that can only purchase specified goods, it is difficult to determine their value on one hand, and it is also unfair to taxpayers on the other hand.

　　(Five) Should there be a tax exemption threshold?

　　Currently, China has a corresponding tax exemption threshold for the collection of general personal income tax, but the批复 issued by the State Administration of Taxation regarding the taxation of Online casino and How to find it transactions does not involve the tax exemption threshold. Generally, Online casino and How to find it transactions are considered small transactions, and for small transactions of a few yuan or a dozen yuan, a 20% income tax rate seems too high.

　　Conclusion

　　The issuance of this notice is against the backdrop of the global financial crisis. Now, it is widely believed that one of the main reasons for this financial crisis is the inadequate regulation of financial innovation (including financial derivatives) by the state. Therefore, the original intention of the Tax Administration Bureau was to monitor and restrict financial innovation. However, the timing of this regulation’s issuance is not appropriate, and it not only fails to achieve the effects of monitoring and regulation but may also cause further chaos in the market. Moreover, we cannot throw the baby out with the bathwater. To put it metaphorically, if financial innovation is 100 points appropriate, then the United States has already reached 200 points and must be restricted; while China is only at 50 points and needs to be vigorously developed.

　　Therefore, under the circumstances that relevant laws and regulations have not yet been issued in our country to formally regulate the Online Casino and How to Find It trading market, the timing of this regulation’s issuance is not appropriate, and it faces various implementation difficulties such as poor operability and the lack of supporting regulations. Faced with the immature Online Casino and How to Find It trading market, the author believes that the state should promptly stipulate the legality of Online Casino and How to Find It transactions, regulate the Online Casino and How to Find It trading market, issue relevant supporting laws and regulations, and at the same time, encourage innovation and reasonably guide its development. After the Online Casino and How to Find It trading market in our country matures, it can then gradually transition to tax and other monitoring measures.

　　References

　　I. Introduction

　　(I) Overview of Online Casino and How to Find It

　　Due to the diverse forms of Online Casino and How to Find It and its still preliminary stage of development, many phenomena are still unclear. There are also many controversies in the academic community regarding its definition. Currently, the meaning of Online Casino and How to Find It refers to the issuing entities being other entities or individuals other than the central bank, mainly non-financial institutions’ network operators. Online Casino and How to Find It is stored in digital form on the network or electronic devices and circulates through data transmission via network systems. It performs payment functions similar to currency, which can be used to purchase real goods, virtual assets, and electronic services.

　　(II) The Development and Application of Online Casino and How to Find It

　　(1) Current Development Status Abroad

　　‘Net Beans’ is a product of a company named such. Consumers can make purchases on nearly 200 e-commerce websites that recognize the payment method of Net Beans. ‘Second Life’ (abbreviated as SL) is an interactive 3D platform launched by Silicon Valley internet company Linden Lab in 2003.

　　(2) Current Development Status in China

　　The earliest online virtual currency in China appeared in 2000, when Lianzhong Network began to provide Online casino and How to find it to consumers in the form of points. In order to gain their own interests in this emerging industry of electronic currency, various websites have invested heavily to establish their own payment platforms, among which Alipay of Taobao and Baofoo of EBay are more famous electronic currency systems. The Online casino and How to find it of various websites that have developed increasingly are currently in a closed state. Online casino and How to find it relies on individual websites as the background, providing relatively closed centralized services for the value exchange among various products within the website. There are still certain barriers to conducting currency exchange between websites, but from the above information, it can be seen that some Online casino and How to find it have gone beyond the预先设定的范围, and to some extent, have exercised the monetary functions of the virtual world.

　　II. Research Progress of Online casino and How to find itsports betting planJoin us

　　Currently, the research on Online casino and How to find it both internationally and domestically is still in its infancy, with no mature theories yet. The regulation of Online casino and How to find it in China is also in a legal vacuum. There is no definitive conclusion on whether Online casino and How to find it will challenge the legal tender status of the Renminbi or impact China’s financial market. Therefore, the research on Online casino and How to find it is a challenging task with significant practical significance.

　　(I) Current Research Status Abroad

　　Currently, there is still a lack of relevant monographs on Online casino and How to find it both domestically and internationally. As for literature on the impact of Online casino and How to find it on monetary policy, it is even rarer. Relevant information is mainly scattered in reports published by international organizations such as the Bank for International Settlements (BIS) and the Group of Ten, as well as in academic papers published by some scholars and researchers.

　　(II) Current Research Status in China

　　Research on Online casino and How to find it in China began in 2000, but there are not many systematic and in-depth studies on Online casino and How to find it. Most of the discussions are in the form of news commentaries. Most academic literature studies the issue of Online casino and How to find it from the perspectives of economics and finance, focusing on computer technology and security, financial supervision, the online gaming industry, currency, and other fields. The views on the impact of Online casino and How to find it on monetary policy are scattered in some scholars’ articles, mainly including: Xie Ping and Yin Long proposed in their article ‘Financial Theory and Governance under the Network Economy’ that the development of Online casino and How to find it will have an impact on the theory of monetary supply and demand and the control of monetary policy. Chen Yulu and Biao Weihong pointed out in their article ‘Analysis of the Risks Faced by the Central Bank in the Development of Electronic Currency’ that the circulation of Online casino and How to find it will cause the Central Bank to face the risk of losing the right to issue currency, losing the income from coinage tax, and the failure of monetary policy. Li Shi analyzed in his article ‘The Development of Online casino and How to find it and the Reconstruction of Monetary Theory and Policy’ that the use of Online casino and How to find it will change the supply of money and cause changes in the money multiplier, thus generating money creation, and conducted a theoretical analysis of the impact of Online casino and How to find it on monetary policy. In the book ‘Theoretical Analysis of Online casino and How to find it’, Sun Ning, a comprehensive work on the analysis of Online casino and How to find it in China, divides Online casino and How to find it into primary Online casino and How to find it and high-energy Online casino and How to find it, and conducts a detailed analysis of the current situation and future development trends of Online casino and How to find it. In addition, some important literature on the issue of Online casino and How to find it in China include ‘Monetary and Financial Economics’ compiled by Huang Xian, and ‘The Nature of Online casino and How to find it and Its Impact on Currency Circulation’ by Zhong Xiaosheng, etc.

　　Third, the Issues Existing in Online casino and How to find it

　　(I) The Lack of Relevant Laws

　　Currently, China has not issued any relevant laws and regulations for Online casino and How to find it. The current laws do not recognize the legality of virtual property, and the state has no relevant laws and policies to ensure the legality and standardization of virtual item transactions. The protection of virtual property cannot find clear legal basis, resulting in many disputes related to virtual property cannot be resolved according to law, causing many difficulties for judicial organs in conviction and sentencing, and also causing many legitimate virtual properties to be infringed upon, and the legitimate rights and interests of citizens cannot be effectively protected. At the same time, this also makes the transaction between Online casino and How to find it and real currency only possible through underground secret transactions, with chaotic transaction behavior and rules.

　　(II) The Lack of Supervision

　　As a payment tool and currency form of issuance, Online casino and How to find it is no longer similar to general commodities. Its stable and legal circulation plays a certain role in stabilizing China’s financial market. Since the issuance of Online casino and How to find it does not require strict filing or approval and adopts a retail method, this means that the holders of Online casino and How to find it do not have a clear understanding of the total amount and issuance status of these Online casino and How to find it. The asymmetry of information may lead to moral hazard on the part of the issuers of Online casino and How to find it. Currently, there are a large number of Online casino and How to find it circulating in the market, and they are guaranteed by the reputation and strength of each operator. If an operator closes down due to poor management or poor credit, the large amount of network currency issued by it will be worth nothing in the market. If such a situation occurs, people will lose trust in all Online casino and How to find it circulating in the market, which is bound to cause chaos in the Online casino and How to find it market. Therefore, supervision of the network operators issuing Online casino and How to find it is necessary.

　　References

　　[1] Xie Ping, Yin Long, Financial Theory and Governance under the Network Economy[J] ‘Economic Research’

　　[2] Chen Yulu, Bian Weihong, Analysis of the Development of Electronic Currency and the Risks Faced by Central Banks[J] ‘International Financial Research’

　　[3] Li Shi, The Development of Online Casino and How to Find It and the Reconstruction of Monetary Theory and Policy[J] ‘World Economy’

　　Comparative Analysis of Financial Management in Knowledge-based Enterprises

　　The concept of financial management in knowledge-based enterprises is different from that in traditional enterprises. Firstly, the concept of financial management serving knowledge management includes two main meanings: one is that knowledge-based enterprises should change the concept of enterprise management centered on financial management that is popular in traditional enterprises, and instead adopt a concept centered on knowledge management, so financial management should serve knowledge management; the other is that the development, utilization of knowledge assets, and technological innovation activities in enterprises all require the support and participation of financial management activities. Secondly, the concept of high returns with high risks. Knowledge-based enterprises are characterized by the coexistence of high returns and high risks. To achieve high returns, one must accept the existence of high risks. Therefore, knowledge-based enterprises must break through the conservative and negative risk-avoidance concept in traditional enterprise financial management and establish a concept of bravely undertaking risks under the premise of reasonable matching of high returns and high risks, which is also the mission entrusted to it by society and history. The main risks of knowledge-based enterprises come from technological innovation, which is the key to their survival and development. If technological innovation stalls or is not responsive enough, it will lead to the collapse of the enterprise. Therefore, between waiting for death and the possibility of obtaining high returns with high risks of technological innovation, knowledge-based enterprises can only choose continuous technological innovation.

　　It is widely known that financial management usually includes such contents as fund raising management, investment management, and distribution management. In knowledge-based enterprises, these contents will undergo significant changes.

　　In terms of fund-raising management, raising sufficient capital is one of the prerequisites for a company to achieve its management goals of survival, development, and profit. In traditional enterprises, raising capital mainly refers to raising funds; while in knowledge-based enterprises, knowledge occupies a dominant position in the enterprise’s fundamental, becoming an important source of core competitiveness. Raising capital not only includes raising funds but is more importantly about raising capital. In the price of chips produced by Intel Corporation, raw materials and energy account for only 3%, equipment and facility costs account for 5%, direct labor accounts for 6%, and more than 85% of the price is attributed to knowledge, patents, and technology. For enterprises, how to raise various knowledge capitals that are at one’s disposal will become an important starting point for corporate financial management, and the combination of ‘raising knowledge’ and fund-raising will be an inevitable trend. In fact, the raising of monetary capital and human capital are mutually promoting. The raising of monetary capital creates conditions for the raising of human capital, and only by raising a certain amount of monetary capital can human capital be attracted, and intangible assets can be purchased or researched and developed; conversely, the raising of human capital will help in the raising of monetary capital. Because in the knowledge-based economy, whether a company is competitive and has prospects for development is not determined by physical assets and the number of equipment, but mainly by whether it has outstanding managers and technical personnel, whether it has patents, technical know-how, goodwill, famous trademarks, and other intangible assets; whether it has one or more virtual organizations that can cooperate extensively with the company at any time. Human capital is the ‘soul’ of the organization, while material capital is just the ‘body’ of the organization. Therefore, the size of an organization’s fund-raising ability basically depends on its ability to possess the aforementioned intangible assets. In other words, with high-quality human capital, even without any physical capital, the holder of funds is willing to provide monetary capital for your disposal; on the contrary, if there is only physical capital without human capital, no one will be willing to provide monetary capital. Therefore, in the stage of fund-raising, corporate financial management should achieve such a virtuous cycle – through raising monetary capital to create conditions for the raising of human capital, through other functions of financial management, to give full play to the role of human capital, create greater value, and raise more monetary capital! To further open up channels for expanding and strengthening the enterprise. In terms of investment management, traditional financial management focuses on the management of fixed asset investments, thereby generating a series of fixed asset investment decision models. However, under the conditions of the knowledge-based economy, the focus should shift to the management of intangible asset investments, and decision-making models for the feasibility of intangible asset investments should be studied. Fixed asset decision models such as net present value method and internal rate of return method can also be used for intangible asset investment decisions, but need to be adjusted significantly. Especially, determining the net cash flow, discount rate, and time length of intangible assets is a rather complex issue. Since the knowledge-based economy is a society with a very fast pace of change, for the calculation of the value of an intangible asset investment, one is that the time should be short rather than long; two is to fully consider investment risk factors, the coefficient should be small rather than large, and the discount rate should be high rather than low; three is that the time interval can be quarterly or even monthly. Moreover, ‘}}The cost of acquisition and use of human capital should cover a wide range rather than a narrow one.

　　In terms of profit distribution management, the profit distribution of traditional enterprises is based on the foundation that ‘capital is the core productive factor of enterprise development’. Therefore, profits are naturally considered as capital formation, and profit distribution should also be allocated according to the capital contribution ratio of the investors. However, in knowledge-based enterprises, this foundation has changed. The most important productive factor of enterprises is human capital, rather than monetary capital. The actual control of the enterprise is in the hands of managers and technical personnel. High intellectual human labor is the main source of profits. Human capital determines the core competitiveness of knowledge-based enterprises, and it will also be the most important factor in determining the formation and distribution of wealth. Therefore, the focus of profit distribution should shift to the owners of human capital, rather than the owners of monetary capital. How to determine the size of human capital and in what form to distribute it are important issues that need to be studied in profit distribution management. In knowledge-based enterprises, knowledge owners lead the capital shareholders, employees, and all relevant stakeholders to jointly own the enterprise. Although they did not directly invest material capital into the enterprise, they all contributed economic value through their knowledge and skills, making significant contributions to the formation of enterprise surplus. According to the principle of ‘who contributes, who benefits’, these stakeholders are all the subjects of enterprise property rights and have the right to participate in the distribution of surplus. To adapt to this change, knowledge-based enterprises should change the profit distribution model of investment allocation and should distribute according to the ‘capital + knowledge’ model, that is, to distribute among all owners who invest material capital and knowledge capital into the enterprise, according to their contributions, and combined with the size of risks undertaken by various stakeholders. This can promote efficiency while also considering fairness. Currently, some knowledge enterprises at home and abroad have made some beneficial explorations in the pricing and distribution forms of human capital, such as stock option systems, employee stock ownership plans, and residual profit distribution rights systems, etc. In summary, the owners of human capital will become participants in the distribution of after-tax profits of enterprises.

　　3 Innovative financial management of knowledge-based enterprises

　　In addition to the reforms in the aforementioned financial management content, the financial management of knowledge-based enterprises also has the following innovative aspects:

　　(1) Risk management has become one of the important aspects of financial management in knowledge-based enterprises. With the advent of the knowledge economy era, the application of network technology brings new risks and greater challenges to knowledge-based enterprises. Due to the networking and virtualization of economic activities, the rapid increase in the speed of information dissemination, processing, and feedback, if there is insufficient and timely disclosure of information internally and externally, or if enterprises cannot timely and effectively select and utilize internal and external information, it will increase the decision-making risk of enterprises; due to the advancement of technology and the acceleration of the speed of knowledge update, the product life cycle is constantly shortened. If enterprises and their employees cannot timely adapt to the development and changes of the surrounding environment, it will increase the risk of enterprises; under the drive of the pursuit of high returns, enterprises will invest a large amount of capital in high-tech industries and intangible assets, and the investment risk will also be further increased. Risk management will help enterprises enhance predictability, systematically identify potential risks, and effectively prevent and resist various risks and crises, thus improving the forward-looking nature of decision-making. In the process of risk management, strengthen investigation and research, use scientific methods to carry out feasibility analysis of investment projects, improve the scientific nature of investment decision-making, and reduce and avoid the losses caused by investment mistakes to enterprises.

　　(2) Improve the method of value compensation for intangible assets. In knowledge-based enterprises, intangible assets are the main part of the enterprise assets and occupy a dominant position in enterprise development. Compared with tangible assets, it is difficult to accurately predict the time for the acquisition of investment returns from intangible assets, and the existence of excess returns is also uncertain. Relatively speaking, the investment risk of intangible assets is greater, and its calculation method cannot be determined, and there is no regularity to follow. It can be considered to adopt a method similar to the accelerated depreciation of fixed assets for amortization. The object of financial management has been extended from ‘capital’ to ‘information’. Knowledge-based enterprises are greatly influenced by major changes in information technology, industrial structure, production methods, and even lifestyles. As a result, the operation of enterprises increasingly depends on customers, suppliers, and the changes in industry economy, regional economy, and even global economy. In this case, the phenomenon of a loose network cooperative relationship formed by a number of corporate entities is extremely common. In this situation, the value created by the information activities of enterprises is increasingly rising in the production of products or provision of services. The technical content of enterprise products is increasing, and the management activities of enterprises are more focused on the management of information resources and information activities. Therefore, the object of enterprise financial management is no longer limited to ‘capital flow’, but has been extended to ‘information resources’.

　　Introduction

　　In today’s era, the way human economic activities are conducted has undergone unimaginable changes. The material form of wealth has gradually faded away, and the trend of wealth virtualization has become increasingly evident. The psychological needs of individuals have already emerged as a powerful economic driving force on the forefront. Financial economic transactions with a large amount of virtual value but little use value, such as securities, bonds, stocks, futures, and options, have emerged in large numbers to meet human psychological needs. In the face of the trend of economic virtualization, especially since the outbreak of the 1997 Southeast Asian financial crisis, the instability of virtual economy and its possible negative impact on the national economy have become topics of discussion among various circles at home and abroad. The subprime mortgage crisis that occurred in the United States since July 2007 was also a negative result of the high degree of economic virtualization. The instability of virtual economy often brings risks to the entire economic system, so it is necessary to establish a risk early warning system for prevention.

　　The Generation of Risks in Virtual Economy

　　Virtual economy refers to economic activities or fields that operate independently according to specific laws, centered around the operation of virtual capital, and脱离实体经济的价值形态, in order to obtain value appreciation. Virtual capital is produced on the basis of loan capital and banking credit systems, and is a product of the credit system and monetary capital in the market economy. It includes bank loans and credit (promissory notes, bills of exchange), securities (stocks, bonds), real estate mortgages, and various financial derivatives, etc.

　　The development of the virtual economy provides consumers with an opportunity to participate in profit distribution. Workers can use the technical tools provided by the virtual economy to independently complete an investment with a good prospect (such as venture capital mechanisms), thus independently owning their own achievements and getting rid of the absolute control and exploitation of capital. At the same time, the trading of securities, futures, options, and other virtual capital, although it can be used as an investment purpose, cannot be separated from speculative behavior, which is determined by the need for market liquidity. According to statistics, most of the newly added calculable GDP in the world is in the form of the virtual economy, including financial assets, derivative financial instruments, and other economic activities related to the operation of the virtual economy. The total value of modern international financial transactions has exceeded 60 to 70 times that of international trade.

　　In modern society, another economic product of the virtual economy is the credit cards held by the ‘月光族’ and the ‘millionaires’. Credit cards allow users to borrow from the bank when their shopping needs exceed their payment ability. This allowance is essentially a virtualization of present and future wealth, turning the final and present values of the wealth of ‘card slaves’ and ‘card gods’ into invisible and intangible numbers on the cash withdrawal machine. Any economic transaction can be completed through the increase or decrease of numbers. This payment method is convenient and quick, and more importantly, it is not affected by liquidity pressure. Anything has two sides; once the bank considers it as malicious overdraw or the repayment is overdue, the bank will impose punitive interest rates on the cardholder, so many credit card users have become ‘card slaves’.

　　III. The Relationship between Virtual Economy and Real Economy

　　The virtual economy originates from the real economy but cannot be separated from it, and there are intricate connections in many aspects: from the perspective of the price system of production: the real economy is a price system formed by cost, and due to constraints such as cost and resource endowment, the fluctuations in the flow and direction of capital are not large; the virtual economy is a price system formed by psychology, and the carrier of value movement is money. The movement of the social and economic value system is connected in both time and space dimensions by money, and the way money moves determines its strong volatility and sensitivity.

　　From the perspective of the overall operation process of the economy, although the development of the real economy requires the support of the virtual economy in terms of capital and information, the operation of the virtual economy cannot be separated from the support of the real economy at any moment. In view of the fluctuations in the benefits of the real economy, the price of virtual capital in the micro foundation of the virtual economy loses the benchmark of change, and the virtual capital price has the reason for dramatic fluctuations, so the virtual economy is impossible to develop sustainably. In the operation process of the real economy, affected by the ability of operators and the external market environment, the credit ability, profitability, and technological innovation progress of micro enterprises will face uncertain threats. This series of uncertainties will quickly spread to the virtual economy through the economic indicators of the real economy, causing strong fluctuations in the price of virtual capital in the virtual economy, with the market changing rapidly and unpredictably, thus bringing huge risks.

　　Due to the habit of running a public relations company, Yang Zhuo would browse the news every day, setting keywords to capture the content he was interested in. After joining Asicme, the keywords were reduced to two: Asicme, Bitcoin. June 28th was a lucky day for Yang Zhuo. On this day, the world’s largest Bitcoin trading platform, Mt.Gox, received a money service business license from FinCEN (the Financial Crimes Enforcement Network of the U.S. Department of the Treasury), which meant that Bitcoin was treated as a legal currency by the U.S. government.

　　When he saw this news, he waved his fist and shouted ‘牛逼,’ almost knocking over the可乐 next to him, destroying the Avalon mining machine produced by the ‘Pumpkin Zhang’ brand, which was priced at 300,000 RMB and extremely difficult to buy.

　　Three months earlier, on March 18th, FinCEN issued a guidance. This document, numbered Fin-2013-G001, titled ‘Regulations on the Holding, Exchange, and Use of Online casino and How to find it,’ was the first to clarify the legal boundaries of Online casino and How to find it, providing a realistic foundation for defining Bitcoin in the future.

　　But when Yang Zhuo waved his arms, everyone did not know what had happened. Even Kim, who was constantly browsing Reddit (the most popular news aggregation community in the United States), had not yet covered this information.

　　“What happened?” Kim asked. Kim, from the United States, was the first person in China to complete an offline transaction with Bitcoin, and thus he also appeared on Central Television. The transaction took place at the 3W Cafe in Zhongguancun, Beijing, where he did not have Renminbi on him, so he dared to try, proposing to exchange a cup of coffee for Bitcoin, and unexpectedly became famous overnight.

　　As if reporting an important message like World War II, Yang Zhuo looked at Kim and said loudly, ‘Your government has recognized Bitcoin as a legal currency.’ The office, which was less than 10 square meters and crammed with a dozen people, fell silent for a few seconds before erupting into chaos.

　　Social experiment triggered by the paper

　　In simple terms, Bitcoin is an electronic currency and lottery generated by an open-source P2P software, and it is a type of network Online casino and How to find it. Unlike traditional currencies based on central banks, it was born from a paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ by a mysterious person named Satoshi Nakamoto.

　　On October 31, 2008, this paper appeared on the Internet. Ten days later, a project called Bitcoin appeared on the world’s largest open-source software development platform. It was named Bitcoin. On January 3, 2009, Satoshi Nakamoto issued the first 50 Bitcoin in history, and the entire system network began to operate. One year later, in the spontaneous trading of Bitcoin forum users, the first fair exchange rate of Bitcoin was generated. This transaction was a user sending 10,000 Bitcoin to buy a pizza.

　　As for Satoshi Nakamoto himself, he has always been a legend, and to this day, no one knows his real identity. After Bitcoin took shape, he disappeared–some people joke that he ‘crossed over’, and some speculate that he is a pseudonym for a team of a large company.

　　In summary, if you read the whole paper, you will find that it is a social experiment with an idealistic atmosphere, based on mathematics and cryptography. In the paper, Satoshi Nakamoto wrote: ‘We very much need such an electronic payment system that is based on cryptographic principles rather than credit, so that any two parties that reach an agreement can make a direct payment without the involvement of a third party intermediary.’

　　To put it simply, Bitcoin is equivalent to a computing power or ‘algorithm’ in the real world.

　　To ensure the transparency and controllability of this monetary system, Satoshi Nakamoto designed an algorithm called SHA-256. Starting with 50 initial Bitcoin, every transaction must be recorded in the global wallet to be recognized, and the new Bitcoin increment comes entirely from the ‘mining machines’ that record transaction information–the system will automatically screen out the most capable ‘mining machine’ in each period of information calculation and reward Bitcoin.

　　Buying and selling are automatically extended in the Bitcoin system. In order to get more Bitcoin, ‘mining machines’ will compete to process transaction data. The ‘mining machine’ that first processes the difficult problem gets a reward of 50 Bitcoin, and then the area of related buying and selling data is added to the entire chain. As the number of ‘mining machines’ increases, the difficulty of processing each transaction data also increases, which keeps the productivity of each buying and selling area at about one Bitcoin every 10 minutes. In addition, every time the number of areas reaches 210,000, the reward is halved, from 50 Bitcoin to 25, and then from 25 to 12.5, and so on. In this way, by 2140, Bitcoin will reach the estimated limit of 21 million.

　　This theoretically ensures that no person, institution, or government can manipulate the total amount of Bitcoin or create inflation.

　　The new world brought by Bitcoin is being accepted by an increasing number of people. The popularity of Bitcoin has led to a straight-up surge in its exchange rate. In November 2012, the historical highest exchange rate of Bitcoin was only 33 dollars, but this year in April, the exchange rate of Bitcoin surged straight to 266 dollars. Moreover, the number of people who currently own Bitcoin is only tens of thousands, compared with the billion internet users, its growth space is very large. This is also an important reason why most Bitcoin holders are very confident at present, and it is also the reason why many people hold Bitcoin as an investment opportunity.

　　The recognition of Mt.Gox by the US FinCEN has given Bitcoin a legal circulation basis in the most technologically advanced country in the United States. Previously, the government had been delaying in making a judgment, and the illegal risk of using Bitcoin had prevented many transactions from being carried out. Now, the number of transactions supporting Bitcoin is increasing, such as you can use Bitcoin to buy ZARA – on a fashion shopping website called Bitfash. With the mobileization of electronic wallets, using mobile phones to trade Bitcoin is also more convenient, which will be another favorable factor for Bitcoin to enter people’s lives.

　　Chinese Bitcoin players

　　Although most Bitcoin enthusiasts and pioneers come from the United States, China is becoming an important Bitcoin user center.

　　The software download and storage website SourceForge regularly provides information on download volume in various countries. In 2012, from the download volume of Bitcoin wallets, China ranked 6th or 7th, with less than 28,000 downloads. In 2013, the situation began to change, in May 2013, the download volume in China reached 84,000 times, ranking first, even surpassing the United States.

　　In April 2013, The Pirate Bay, EZTV, announced that they would accept Bitcoin donations after the Ya’an earthquake in Sichuan Province, China. The public welfare fund One Foundation announced that it would accept Bitcoin as earthquake donations. Bitcoin in China quickly went from obscurity to being in great demand. And the Asicme team is a domestic ‘mining machine’ company that was just established in May of this year.

　　In the one and a half months since the establishment of Asicme, the turnover has exceeded 20 million yuan, with about 600,000 yuan in cash or Bitcoin reserved for machines every day. At this time, their machines have not yet been mass-produced and will not be shipped until September, and the bookers even dared to invest without seeing the real machine. This rapid development from the side shows how great the chain reaction is when the channel monopoly of mining machines is broken and the user threshold is reduced to the lowest.

　　Speculation and risk

　　Even though it concerns his own profits, Yang YaoRui still insists on writing in red on the website: ‘The risk of Bitcoin mining is huge, please judge for yourself and invest cautiously.’

　　And the layout he has made for Asicme is also to extend the line of defense to disperse risks. They not only sell mining machines but also provide hosting and operation services for mining machines. Because the mining machine is running 24 hours a day, it will produce noise and also has very high requirements for network and power stability. The charging method is that users pay 8% of the computing power.

　　If you don’t want to buy a mining machine, you can also directly purchase computing power. In the Bitcoin world, this is called a mining pool, which somewhat resembles the meaning of cloud servers. Asicme provides thousands of GH (gigahash) of computing power for purchase, with an average price higher than that of buying a mining machine, at 798 yuan for 1GH/s. These two customized services will greatly reduce the threshold for ordinary people to enter mining, and renting computing power can attract more small retail investors to enter.

　　他们还制作了交易比特币的App，用来存款、转账。“我们不排除自己发展成比特币界的支付宝。”杨卓不掩饰他们的野心。而面对比特币兑换法币汇率的起伏，杨曜睿看得很开：“如果看好它就长期持有。总之Asicme现在正一直大量买入比特币。”

　　这一系列布局，还有对比特币的态度，事实上都基于杨曜睿个人的判断：他崇尚去中心化的货币体系，认为比特币是一场货币的革命。虽然现在有风险和泡沫，但放在长期去看，其具备投资价值，“这不代表比特币是外界批评的庞氏骗局”。

　　但全网计算能力的快速增加，的确将导致收益缩水。目前几乎整个行业的挖矿者都是购买的“期货矿机”，是以收到机器那天的收益开始算，挖矿类似于一场赌博。

　　不过杨曜睿对未来充满信心：“当越来越多的人持有并使用比特币，而不是炒比特币时，它的价值将会以一个更合理的方式释放。未来存在这样一个情况：即使挖矿收益降低，但单个比特币的价值上升，抵消掉收益降低这一部分。”所以他建议，如果买家不那么着急从中获利，不如长期持有机器，等到收益低于电费、网费时再卖掉。

　　尽管充满憧憬，他们也很清楚现在的压力，即来自主流群体和政府的认可。他们十分担心这种Online casino and How to find it 会在襁褓中被政府扼杀–这意味着这一切布局都打了水漂，还不如匿名捞一把就走。所以当FinCen批准Mt.Gox时，他们的激动也就不难理解了。

　　“假如这个货币在全球范围流通，每个人都持有，且将之作为法币去使用，那么2100万个比特币的价值事实上是等于全球生产总值。它价值的涨和跌与中央银行无关，也就彻底断绝了一些政府的央行利用货币发行套取民利的行为。”在著名的比特币论坛中，一个用户写下了如上的话。

　　“或许代替法币的不是比特币，但未来肯定会出现一个更加优秀的Online casino and How to find it 币种。这是一场变革，而我们就处在变革的潮流中，想想都很兴奋。”杨曜睿如是说。

　　（应采访对象要求，文中杨卓为化名）

　　什么是比特币交易

　　比特币钱包以一个地址的形态出现。一个人可以有很多个钱包，这些钱包由比特币客户端生成。每笔比特币交易都需要一个见证人，也就是全球所有比特币持有者，担保交易发生过。

　　Taking a transaction where A pays B as an example. When A initiates this transaction, he must broadcast the signed transaction slip as widely as possible on the P2P network, and eventually let every node know about this. B continuously receives confirmation messages from the P2P network. When it receives enough confirmation messages, it considers that A has indeed sent this transaction slip. This means that the transaction is completed, and it also means that the money B receives is legitimate and can be used freely.

　　In essence, the terminal network of Bitcoin does not record who owns every single coin, but it records every transaction from its birth to the present, and calculates how much money is in each account, so transaction volume and personal privacy are unified here: you do not know whether I am the owner of a certain wallet, but you know how many bitcoins were traded in a certain wallet. Transactions are transparent, but wallets are anonymous.

　　What is mining

　　In the past two years, some domestic universities have introduced virtual companies into different teaching fields and made positive attempts at this teaching method, achieving remarkable results and accumulating certain experience. This article aims to consider whether virtual companies can be applied in the field of marketing education.

　　Secondly, the necessity of virtual companies participating in marketing education

　　The necessity of virtual company participation in marketing education can be considered from the following two aspects:

　　1. Requirements of the marketing major itself

　　The essential capabilities required by most universities for marketing students include: (1) Basic abilities. Students should have strong language and writing skills, be able to accurately grasp conversational techniques in daily interpersonal communication, and write various professional texts in a standardized manner; they should have strong computer and English comprehensive application skills; they should have strong social and public relations skills, be able to communicate and coordinate relationships with users, intermediaries, government departments, news media, and other parties; they should have strong cooperative abilities, be good at accepting and respecting others, and maintain harmonious interpersonal relationships. (2) Professional abilities. Marketing students must first possess marketing professional abilities such as market research, forecasting and analysis, marketing planning, sales management, public relations, business negotiation, and customer management; at the same time, they should have a thorough understanding of various professional knowledge involved in enterprise production and operation, especially being very familiar with the technical performance, structural characteristics, and production process of the enterprise’s products. Therefore, marketing students should also understand knowledge related to production and manufacturing as well as commodity circulation. (3) Innovation ability. The mission of marketing is to continuously discover market opportunities and create their own markets, thus requiring marketing students to have strong innovative abilities. Innovation ability not only manifests itself in the acquisition, reorganization, and application of knowledge, but also in the pursuit of innovation, a mindset of actively seeking solutions to problems, a keen sensitivity to new ideas, new technologies, and new market opportunities, and an ability to positively change oneself and the environment in response to changes.

　　2. The limitations of the existing marketing teaching model

　　Currently, in the teaching of marketing majors in most colleges and universities, traditional teaching methods still occupy a large proportion. Teachers explain theories and concepts systematically and clearly, but often pay little attention to whether students can understand, remember, digest, absorb, and transform what they have learned into their own professional skills, and whether they can correctly apply the knowledge they have learned in practical work. This teaching method of doing ‘market’ in the classroom and ‘marketing’ on the blackboard must be changed.

　　Three, Application Methods of Virtual Companies in Marketing Teaching

　　Inspired by a survival game model of software engineering education proposed by several teachers, Wang Yanqing, Jiao Daguang, Su Xing, Zhao Yanping, this paper also proposes a virtual company teaching model for marketing majors. This model consists of four roles, namely virtual companies, portal companies (a real company), colleges or teaching and research sections, and real-world companies outside the school. (As shown in Figure 1)

　　1. Role Setting and Function: (1) The role of the college or teaching and research section: The management level of the college should formulate a supportive policy as a solid policy foundation for the implementation of the entire model. (2) The role of the portal company: A real company should be established to act as the gateway for all virtual companies. Business transactions between virtual companies and real-world companies can be conducted through the portal company. The members of this real company consist of teachers and full-time staff. Functions of the portal company: First, to resolve legal issues such as finance and contracts that virtual companies cannot effectively address. Second, to provide some business activities for virtual companies, such as accepting market research orders from enterprises as a professional marketing research company, then issuing tenders to virtual companies, and virtual companies bidding for business. Third, to guide virtual companies in business, provide business information, and offer support to the best of their ability. (3) The role of virtual companies: All marketing students are required to join virtual companies, which act as subsidiaries of the portal company. Each student has the right to join any company, of course, on the premise that the company is willing to accept them. The size of each virtual company is not limited, which is entirely dependent on the strategic decisions of the company’s management. Under the protection of the college and the portal company, these virtual companies can gradually grow into members of the strategic alliance led by the portal company. (4) Environment. In this model, the real-world companies and market outside constitute the external environment for the operation of the portal company and virtual companies. 2. The Use of Currency

　　A successful company should have a sound financial system, and so should a virtual company. To evaluate the operational status of each virtual company, it is necessary to establish a comprehensive financial system. This task should be completed by the portal company, which is responsible for managing the currency that can circulate throughout the model.

　　Currency is used for communication between the portal company and external companies, as well as for paying the virtual company for the income obtained after completing the project, which is managed by the college or the portal company manager.

　　Of course, to ensure the financial security of the portal company, the virtual company itself is not qualified to sign agreements with external companies, but it can seek business opportunities, and the portal company is responsible for deciding whether to engage in transactions after finalizing the business.

　　3. Virtual Company Operation Cycle

　　Company establishment: Students apply in groups, and the division of labor is completed by the students themselves, and the company is registered on the portal. At the same time, they receive recognition from the portal company and are eligible to participate in bidding and other business activities of the portal company. Company dissolution: One situation is that students voluntarily dissolve the company. However, the student union will lose this learning and evaluation opportunity, and the consequences are decided by the college policy. Another situation is that students need to reorganize and disband the original company before establishing a new one. Previous performance is distributed among the members of the virtual company in a certain proportion. The third situation is that students graduate and apply for dissolution.

　　Although the worst outcome of a virtual company is the absence of business, since there are no expenses, the virtual company can still exist.

　　4. Evaluation of Model Participants (mainly students)

　　The evaluation of a virtual company’s operational performance can be mainly referenced by the amount of capital (currency) it possesses. In addition, the current number of employees, recent development plans, and the competitiveness of the products developed should also be considered as references. Based on these reference standards, the college can even rank these virtual companies, so that well-performing companies can receive certain financial support, while others may have to face rectification due to poor management.

　　IV. Summary

　　The virtual company discussed in this thesis is a new idea in the education of the marketing major, especially in the cultivation of students’ practical abilities. In summary, this method is a new approach for cultivating professional talents in marketing.

　　【Abstract】A virtual company is an artificial simulation environment for economic activities. Using it as a practical teaching place and organizational form for the marketing major is not only necessary for the teaching of the marketing major itself but also effectively overcomes the drawbacks of traditional marketing teaching. In an experiential teaching manner, students can experience the atmosphere of real marketing during the learning process and greatly improve their sensitivity to the market through their own operations. This paper also proposes a feasible model for introducing virtual companies into marketing teaching for reference.

　　【Keywords】Virtual Company Marketing Teaching Application Method

　　Virtual reality technology has developed rapidly for more than twenty years since its rise, permeating into various industries. In 1995, Williams and Hobson first pointed out that virtual reality technology will inevitably have an impact on the tourism industry, and the tourism industry will enter a new information age, also known as the era of virtual tourism. A survey report by Pew Internet American life, a research institution, shows that 45% of adult American internet users in the United States have had experiences with virtual tourism; while according to the Spanish Tourism Board, 70% of people’s travel decisions are made through the Internet. It is evident that the trend of tourism information networking has emerged worldwide. Although virtual tourism is still in its initial stage, its development potential is extremely great.

　　Virtual tourism is a supplement and improvement to real tourism, making breakthroughs in both theory and application of real tourism. The proposal of this research topic makes tourism move from real space to virtual space and network space, covering a wider range and a more complete discipline system. Although there are relevant theoretical achievements and practical experiences in real tourism that can be referred to in the research on virtual tourism, it still belongs to a completely new field of tourism. Issues such as its functional structure, profit model, and operation strategies still need to be explored.

　　I. The Connotation and Characteristics of Virtual Tourism

　　(I) The Connotation of Virtual Tourism

　　Virtual tourism refers to the process of forming a realistic virtual reality scenic area through various visual methods, including virtual reality, so that tourists can obtain information, knowledge, and experiences about tourist attractions. Through the Internet and other carriers, virtual tourism dynamically presents tourist landscapes to people, allowing tourists to choose their routes, speeds, and viewpoints according to their own wishes, and can also participate in events that are happening or communicate with other participants.

　　In addition to the direct utility contained in the concept of virtual tourism, it also has a broader application significance:

　　1. Used for tourism planning. Due to the fact that virtual tourism uses computer simulation of scenic areas, it can vividly display planning and design schemes, has strong operability, and is easy to modify, it can be predicted that it will be widely and deeply applied in tourism planning and design.

　　2. Reproduce tourism landscapes. Developing virtual tourism for those tourism landscapes that no longer exist or are about to disappear is an effective way to protect, reproduce, and spread natural and cultural heritage, and can realize the sustainable development of scenic areas.

　　3. Make up for the defects of reality. Virtual tourism opens up a new space for human survival and leisure, in which ‘human nature’ is fully displayed and played out, and to some extent, makes up for the lack of spiritual and cultural functions in modern society.

　　(II) The characteristics of virtual tourism

　　The characteristics of virtual tourism include the following points:

　　1. Trans-time and space. Virtual tourism can present or organically combine objects and events from the past, present, and future worlds, and can be provided to participants at any time.

　　2. Interactivity. Interactivity refers to communication between people and computers, and virtual tourism interacts with multi-dimensional information space through various sensors.

　　3. High technology. Virtual tourism relies on modern virtual reality technology and modern information technology with the Internet as the core, and without high technology, virtual tourism cannot be produced.

　　4. Economy. Virtual tourism breaks through the limitations of objective conditions, reduces costs, avoids various irresistible constraints, and thus makes ‘tourism’ more affordable.

　　5. Multi-perceptiveness. The virtual tourism environment can provide tourists with a variety of perceptions such as scenery, sound, contact, and experience, making people feel as if they were there in person.

　　Due to the limitations of time, space, economy, and other objective factors, the tourism needs of most people are difficult to be fully satisfied. At this time, virtual tourism based on computer networks with interactive multi-dimensional visualization characteristics has become a flexible and convenient choice. The differences between virtual tourism and real tourism are shown in Table 1.

　　2. The functional structure and profit model of virtual tourism

　　(I) The functional structure of virtual tourism

　　A virtual tourism website is an intelligent system that integrates virtual tourism experiences, tourist communication, travel information, and online booking services, mainly composed of the following functional modules:

　　1. Virtual landscape tourism. The virtual landscape tourism system realistically reproduces the actual scene of scenic areas on the Internet, which is the core component of virtual tourism. With the help of the navigation module and the electronic guide system, tourists can roam along the pre-set routes of the system or choose their own routes to roam. Not only can they enjoy the scenery of these scenic areas through the display screen, but they can also participate in the game plot through the gestures or commands of virtual characters, to understand the humanistic history of the attractions or to have meals, shopping, and other consumer experiences, thus obtaining an experience as if they were actually traveling.

　　2. Travel information planning. The development of virtual travel is inevitably connected with real travel, and virtual travel often plays the role of early experience before actual travel. Therefore, virtual travel has become a channel for potential travelers to obtain various travel-related information. More importantly, with the help of intelligent system tools, virtual travel can comprehensively integrate travelers’ consultation needs for the destination’s ‘food, accommodation, transportation, sightseeing, shopping, and entertainment,’ providing a network application service platform for planning travel itineraries.

　　3. Travel e-commerce. The virtual landscape tour system and virtual travel community are attractive ‘sacred places’ for a large number of travel enthusiasts, and they also attract the gathering of travel-related institutions, becoming an important travel e-commerce platform for travelers to understand, purchase, or book travel-related products and services. For example, the ‘Second Life’ website in the United States has about 4.6 million members traveling in its virtual world, which has over 1,000 attractions, and has also attracted companies such as IBM, Starwood Hotels, and convenient airlines, facilitating online shopping and booking for tourists.

　　4. Virtual travel community. Travel is not only a narrow sense of landscape appreciation, but also a spiritual refuge and a part of interpersonal interaction, which is indispensable for both real travel and virtual travel. The virtual travel community is a living space formed by people through the Internet around travel life. Around travel topics, community members engage in extensive and open communication through text, voice, or video. On the one hand, they can share their travel experiences with other members, thus refining the travel experience; on the other hand, they can also share other members’ travel experiences and obtain various travel knowledge, preparing for actual travel.

　　(II) Profit model of virtual travel

　　The virtual world has always been an emerging field in the development of the Internet. As for how virtual travel can generate income, both domestically and internationally, continuous exploration is still being carried out. As of now, based on the basic structural system of virtual travel, its profit model is mainly divided into the following parts:

　　1. Marketing of travel destinations. The virtual landscape tour system plays a tangible display role before actual travel for travel destinations. In this marketing model, the virtual travel website can charge a large amount of advertising fees. This is also the main profit point of virtual travel websites at present. Virtual travel provides a platform for travelers to obtain travel information, and for those less famous scenic spots, it is a new means of publicity. Therefore, virtual travel operators should mainly target those 3A or 4A-level scenic spots that have potential but are still relatively quiet.

　　2.植入式广告. When a virtual travel website has a high reputation and reaches a certain scale of members, it can negotiate with other enterprises except for travel destinations to embed their commercial advertisements, thereby generating advertising revenue. For example, adding hotels, restaurants, teahouses, shopping malls, and other customer brands, or corporate logos, mascots, product advertising signs, etc., in some scenes of the virtual landscape tour system. However, attention should be paid to the advertising placement skills, avoiding a clumsy insertion, and it is best to integrate it naturally into the plot of virtual travel.

　　3. Online casino and How to find it and item sales. Virtual tourism can be combined with online games, and profits can be generated through the sale of Online casino and How to find it and other items in the game process. Following the practice of buying and selling weapons and equipment in online games, virtual tourism can also allow tourists to exchange Online casino and How to find it for virtual travel equipment transactions, or create their own viewing villas or property hotels in virtual tourism destinations, etc.

　　4. Profit sharing from tourism revenue. Virtual tourism websites can help tourists design and implement travel plans on the one hand through the function of tourism information query and travel route planning, and on the other hand, can recommend customers to tourist attractions, hotels, travel agencies, airlines, car rental companies, and other tourism enterprises, thus sharing tourism revenue with these enterprises and obtaining profits. In fact, the cooperation between virtual tourism operators and these tourism enterprises can be even closer. For example, if users register and participate in virtual tourism and reach a certain score or level, they can get corresponding real tourism price discounts, which will bring more real tourism consumption.

　　5. Online shopping or booking. Virtual tourism is closely related to real tourism. In this functional structure of tourism e-commerce, once tourists show interest in the real landscape or items corresponding to virtual tourism, online shopping or booking can generate profits. Even if users do not actually come to the tourism destination, the sale of local-style clothing, accessories, calligraphy, handicrafts, local products, and other souvenirs can also provide a greater space for the profitability of virtual tourism websites.

　　6. Membership fee collection. In the virtual tourism community, people form different communities according to different tourism interests, obtain high social recognition through interpersonal communication, find psychological and emotional belonging, and realize their dreams through self-image design and spatial environment design. Based on these needs, virtual tourism websites can regularly collect membership fees from long-term participants and develop certain advanced services exclusively for members, such as setting that only members can enjoy this service when converting virtual wealth into real currency.

　　The corresponding relationship between the functional structure of virtual tourism and its profit model is shown in Figure 1. It indicates the profit sources that each functional module of the virtual tourism website can generate.

　　3. Operation strategies of virtual tourism

　　A bad experience in virtual tourism can weaken the attractiveness of real tourism and even lead to the loss of potential customer groups. Therefore, virtual tourism websites should adopt effective operational strategies to enhance customer experience value.

　　1. Improve the virtual tourism function. Virtual tourism is a form of tourism relative to real tourism, and compared with the comprehensiveness of real tourism, virtual tourism is not just a simple virtual landscape tour. It should gradually improve its value and functional system by combining the multi-aspect and whole process of food, accommodation, transportation, sightseeing, shopping, and entertainment in real tourism, thus promoting the in-depth development of the modern tourism system.

　　2. Update virtual tourism products. In the age of information explosion, redundant and outdated information provided by virtual tourism websites may interfere with tourists’ correct identification and selection of useful travel information, making it difficult for them to determine their travel destination, content, and process. Therefore, virtual tourism websites should use rich and clear, timely and accurate travel information to attract tourists and continuously launch innovative and unique virtual tourism products for different types of tourists.

　　3. Control the cost of virtual tourism. From conception, research and development to design and production, virtual tourism goes through stages such as structural design, information collection, information digitization, model construction, database construction, program debugging, and advertising promotion. Often, the construction of a small-scale scenic area also requires several months to even several years, especially during the debugging stage, where careful and detailed checks of each link are required, resulting in high time and human resource costs. Therefore, paying attention to controlling the time and economic costs of virtual tourism development will increase the possibility of profitability.

　　4. Carry out virtual tourism cooperation. Currently, 80% of tourism websites mainly focus on local information or information of a single travel agency, and their service scope is also limited to the regional level. Additionally, tourism enterprises themselves recruit personnel to complete the construction of virtual tourism, and due to factors such as personnel, finance, and materials, the quality is not high. Close cooperation among tourism enterprises, especially the introduction of high-tech professional virtual tourism production companies, will make the development of virtual tourism more rapid.

　　5. Strengthen the promotion of virtual tourism. Virtual tourism websites also have the issue of promoting and recommending themselves to users. Virtual tourism enterprises should adopt an integrated marketing communication approach. For example, by marking the website URL on brochures and gifts, displaying the site in radio or television advertisements, sending emails to customers to promote word-of-mouth recommendations among customers, and publishing reports or articles on popular websites and related tourism media to improve visibility and visitation rates.

　　References

　　[1] WiUiams P. & Hobson J. S. P. Virtual Reality and Tourism: Fact or Fantasy? [J]. Tourism Management, 1995, 16 (6): 429-435.

　　Abstract: With the entry into the network age, a variety of online services are prevalent in the market, and online games, which are popular worldwide, are the most representative. This article takes the equipment of online games as an example to explore the legal nature, necessity, and methods of protecting virtual property.

　　In April 2004, the court upheld the judgment of the first-instance Beijing Chaoyang District People’s Court, ordering the online game operator, Beijiding Company, to restore the lost virtual weapon equipment of the game player, Li Hongchen, and compensate the plaintiff for the economic losses incurred in the lawsuit, totaling 1140 yuan. On March 27 of this year, following the conclusion of the first case of stolen virtual property in China, the Intermediate People’s Court of Lishui City made a first-instance judgment, severely sentencing two ‘Q Coin thieves’, Xu and Chen, for the crime of theft. Since then, the issue of protecting ‘property’ in the virtual world has triggered widespread public concern.

　　With the continuous development of network technology, online games and various virtual spaces have become increasingly popular. Players can obtain various ‘weapons’, ‘levels’, and ‘accessories’ by winning the game or buying ‘Q coins’, which have also become the target of ‘cyber pickpockets’. Thus, a new concept – virtual property – has emerged. And due to the lack of relevant management systems, whether this kind of ‘virtual property’ belongs to players, whether it is protected by law, has become the focus of attention of many netizens and legal scholars.

　　Whether virtual property is governed by the Property Law depends on whether it is the object of property rights. As an object without rights, it must exist outside the human body, be controllable by human power, and satisfy the needs of human beings. The concept of ‘thing’ in civil law is a concept that is constantly developing. Virtual property is independent of the human body; the start and end of the game are also controlled by players using passwords and other specific methods, which is controllable by human power; and such virtual property can make players feel pleasure and a sense of achievement in possessing ‘property’ during the process of participating in the game, which can also be considered to have special value and meet the special needs of human beings, theoretically should belong to the object of property rights. The object of property rights has the following characteristics: the main object of property rights is a tangible thing; the object of property rights is a specific thing; the object of property rights is an independent thing. Virtual property can be considered as a specific thing, so whether it belongs to an independent thing? Although ‘virtual property’ cannot exist independently of the network, as virtual goods are generated on the server of a specific game operator and usually can only be stored on that specific server, controlled by the player himself, it should be considered to have relative independence; virtual property does not belong to tangible things, nor is it other rights outside the legal ownership, but with the development of human life style and means of survival and entertainment, the scope of things as the object of property rights is also expanding. The expansion of the concept of things includes virtual network property. The 71st and 75th articles of the ‘General Provisions of the Civil Law’ of our country have made relevant provisions, and the legitimate property of citizens and legal persons is protected by law. Today’s world is in the era of knowledge economy, and the concept of wealth has undergone an essential change, and property is no longer limited to tangible things, but mainly manifested as intangible property. Therefore, this ‘property’ includes both tangible property and intangible property. The virtual property formed in the network world has many attributes similar to real property. In terms of its origin, there are mainly two aspects: one is to buy it with real money, and the other is to win it by spending a lot of time and energy through ways such as ‘passing the test’. And, virtual property consumes a lot of undifferentiated human labor, should have value, so, virtual property in the network space and other virtual property should be regarded as the object of property rights, and establish ownership and other property rights.

　　Regarding the ownership of virtual property, it is generally believed that the owner should be the player rather than the operator of the online game. Ownership is acquired due to certain legal facts, and the methods of acquisition include two categories, namely original acquisition and inheritance acquisition. Original acquisition mainly includes labor production and interest; inheritance acquisition, also known as transmission acquisition, mainly includes buying, gifting, and barter. In the online world, players continuously upgrade their virtual character’s identity through buying, selling, or paying labor to play games, in order to obtain virtual items, which involves both original and inheritance acquisition. Moreover, another characteristic of online games is that virtual identities and virtual items can be continuously saved, that is, after the player logs off, the operator still saves the player’s data on the server. Therefore, the generation and change of virtual items are not controlled by the operator, but are the result of specific behaviors of the player when accepting the operator’s services. The specific types and quantities of virtual characters and items are completely dependent on the player’s own activities. Operators only provide corresponding services when players are gaming and have no right to arbitrarily modify them. From this perspective, the ownership of virtual items should belong to the players, and such a regulation is also conducive to regulating the behavior of operators and ensuring that the legitimate rights and interests of players are not damaged.

　　There is considerable controversy over whether virtual property can be traded. Players own the property of virtual assets. Ownership is defined as the right to comprehensive ownership of things, which allows the owner to freely possess, use, benefit from, and dispose of their property within the scope of legal restrictions, and to exclude interference from others. It can be seen that virtual property, as an object of property rights, can be disposed of by the right holder, where ‘disposal’ refers to both factual disposal and legal disposal. In terms of legal disposal, it refers to the alteration, restriction, or reduction of rights over the property. The sale of virtual property is within the legitimate scope of property rights. However, in reality, the current laws of our country do not have specific provisions for intangible property on the Internet, which makes the transaction of virtual property very chaotic. Behind the ‘prosperity’ of virtual property transactions, the four links of making viruses – spreading viruses – stealing accounts – selling stolen goods online have already formed a universally recognized industry chain for stealing accounts! The theft and sale of QQ numbers, game accounts, and devices are extremely rampant, and some have formed gangs, with the amount involved reaching hundreds of thousands of yuan. However, what is embarrassing is that, as the judicial system is still in the exploratory stage for cases in this field, some local courts even classify such cases as temporarily not accepting them, seriously damaging the interests of many netizens. The泛滥 of malicious illegal transactions of network virtual items urgently needs to be fundamentally regulatedonline casino victory and The latest website. In this regard, the Chinese government recently issued regulations on restricting the use of online games such as ‘Online casino and How to find it’, and warned that these currencies may pose a threat to the financial stability of the real world. There are also proposals from some members of the National People’s Congress that legislation should be enacted to prohibit illegal transactions of virtual property. He believes that after prohibiting illegal intermediary transactions, the stolen virtual property by criminals will be difficult to circulate, and the ‘motivation’ for further theft will be greatly reduced. Normal virtual property transactions allow the owner to make free choices, which can effectively protect the stolen virtual property. This view is not without reason, but the forced prohibition without完善 existing laws and regulations cannot completely prohibit illegal transactions. Once legislation is enforced to ban, it may very likely prompt the existing transaction forms to shift from above ground to underground, from domestic platforms to foreign online trading platforms, which will not only cause a huge impact on the current online game industry but also increase the cost of government management.

　　There are the following issues in the regulation of virtual property transactions: Firstly, how to determine the ratio between virtual property and real currency transactions. Should it be unifiedly stipulated, or decided by the buyers and sellers or the online company themselves? Secondly, how to manage the real information of netizens, and whether the information of the thief can be disclosed once stolen, and whether it violates their privacy rights?

　　The Ministry of Culture of South Korea recently submitted a proposal to the National Assembly, requesting the addition of the provision ‘Prohibition of Online Casino and How to Find It Intermediaries’ to the ‘Game Industry Promotion Law’, and also provided legislative protection for virtual items as a premise. Under the current increasingly popular Internet, we should also learn from South Korea and take relevant measures to constrain the trading of virtual property. Specific suggestions are as follows:

　　Firstly, China should strengthen the legal regulation of the Internet, clarifying the rights and obligations between online game users and operators through legislation. As a new thing, online games are currently in a legislative vacuum, and the regulation of online game companies is not perfect. Therefore, it is very necessary to strengthen the legislation in this area to regulate the behavior of both parties of the online company, which not only has great significance for protecting virtual property but also can prevent various online crimes and civil disputes.

　　Secondly, online game companies should strengthen industry self-discipline, such as establishing industry associations to formulate various behavioral norms of the industry. For example, how to price various game equipment in online games, there should be a unified understanding among various companies, and they cannot fight independently. This inter-industry competition can lead to difficult-to-solve problems.

　　Finally, netizens should standardize their online behavior, not randomly click and download unknown software to avoid inadvertently downloading trojans that steal accounts. Moreover, they should enhance their legal awareness, realize that some of their actions online are subject to legal liability, and may even lead to criminal liability.

　　Only by integrating the power of society, law, and individuals to protect virtual property online can various new products of the network era contribute to the growth of social wealth and meet the needs of the masses, which is of great practical significance.

　　References

　　[1] Wang Liming. Theory of Property Law [M]. China University of Political Science and Law, 2003.

　　[2] Liu Jingwei. Property Law [M]. Xiamen University Press, 2005.

　　[3] Liu Jingwei. General Theory of Civil Law [M]. Xiamen University Press, 2005.

　　I. Overview

　　With the development of science and technology and the progress of technology, some online games have become popular worldwide. In order to achieve higher scores in the game, these players need a lot of online game coins, but most of them are office workers who do not have time to earn Online casino and How to find it in the network, so they prefer to spend real money to exchange for online currency. Therefore, a new industry has emerged. This industry is to produce game coins through professional training of game experts in countries with relatively inexpensive labor, and some companies buy the game coins produced by them through online platforms, and then sell the game coins to foreigners through online platforms to earn the middleman margin. The game coins are traded in the game, and the payment is made through real-world online banking. The products operated by this emerging industry are the Online casino and How to find it in the popular online games worldwide. However, with the continuous development of this industry, the competition in acquiring game coin prices is becoming more and more fierce, because for virtual products, there is almost no difference in product quality, so various operating enterprises continuously adopt price leverage as an important competitive means, and the possibility of strategic alliances within the industry is relatively small, resulting in increasingly fierce price wars among major operating companies, with the acquisition price rising higher and higher, even showing a trend of恶性 (恶性) price war.

　　Game theory (Game ory) is the study of decision-making under direct interaction between decision-makers and the equilibrium problems of such decisions. That is to say, when the choice of a subject, such as an individual or a company, is influenced by the choices of others, and in turn affects the choices of others, the decision-making and equilibrium problems arise. Therefore, in this sense, game theory is also known as ‘strategic game theory’.

　　In the process of the game, the information transmission between participants determines their action space and the choice of the optimal strategy; at the same time, there is always a sequence in the game process, and the order of participants’ actions has a direct impact on the final equilibrium of the game.

　　Secondly, the game analysis of the price competition behavior of Online casino and How to find it

　　(I) Establishing the model

　　Based on the actual situation of Online casino and How to find it, a game model of price war is constructed. Each operating enterprise is a participant in the game, and its game process has the following four characteristics: ① Sequential game. Competitors have caused a price war in the Online casino and How to find it market to acquire more currency. ② Complete information game. The pricing behavior of enterprises is public, and the prices of each server under each game can be seen through the acquisition of websites, and the prices ultimately have to face suppliers, and competitors can also easily obtain price information. ③ Repeated game. The prices in the market are constantly changing, and operating enterprises have to continue to operate, and the price war will also continue. ④ Zero-sum game. Since cooperation between enterprises in the Online casino and How to find it field is not common, the relationship between enterprises and enterprises is mainly competitive, so it can be regarded as a zero-sum game.

　　(II) The process of the game

　　Firstly, assume that the participants are X and y, who are both operators of Online casino and How to find it, and they compete in the field of Online casino and How to find it. At the beginning, the fixed unit price of Online casino and How to find it is Po. X is an established enterprise entering the field first, with relatively strong strength and occupying the majority of the market share; y has just been established and is a latecomer to the field, occupying a small share of the market.

　　1. The first round of the game (see Table 1).

　　From the perspective of X, it is obviously better to increase prices than to decrease them. From the perspective of y, the effect is the same; increasing prices is also better than decreasing them, with the profit from increasing prices being (5+8)/2—6.5, and the profit from decreasing prices being (3+6)/2—4.5. y will also choose to increase prices. Therefore, in the first round of the game, both x and y adopt increasing prices as their strategy, and each loses 1, with an overall loss of 2, making the overall profit the worst. This is the Nash equilibrium phenomenon, where each participant seeks to maximize their own interests, but the overall interests are not maximized, just like the model constructed.

　　2. After the game.

　　After the first round of the game, if both parties are dissatisfied with the results of the first round of the game, then both parties should coordinate, and mutually recognize that the increase in acquisition price can only cause damage to both parties, so they will weigh the pros and cons, stop the behavior of price increase. However, each enterprise is pursuing the maximum benefit, and such an agreement cannot exist for a long time, and they will try to increase prices indirectly to maximize their interests. This has broken the newly established balance, and in the end, both parties will suffer losses.

　　3. Repeated game.

　　From the analysis after the game, it can be concluded that the mutual price increase behavior between enterprises cannot be completely avoided. Price increase becomes a repetitive process until the price equals the marginal profit, at which point the price increase may stop. The purposes of X and y are all to achieve the maximum benefit, but in such a Nash equilibrium, the overall benefit is constantly decreasing.

　　Three, strategies to avoid the vicious price war of Online casino and How to find it

　　(One) Changing the game structure

　　The previous game process was based on revenue as the enterprise’s goal. We may convert revenue to profit, and accordingly, the benefits of both parties in the game will change, which may no longer meet the conditions of the ‘Prisoner’s Dilemma’ model, thus avoiding a price war. Assuming that the ‘price reduction’ strategy is chosen, the profit margin of the enterprise is 35%, and when the ‘price increase’ strategy is chosen, the profit margin of the enterprise is 25%. As shown in Table 2, when both parties reduce prices, their profits are both 6×35% – 2.1; when both parties increase prices, their profits are both 5×25% – 1.25; when one party increases prices and the other party reduces prices, the increasing party can get a profit of 8×25% – 2, and the reducing party can get a profit of 3×35 – 1.05. In this way, the optimal choice for both parties in the game is to reduce prices, thus avoiding a恶性 price war.

　　(Two) The entry price war game of industry associations may avoid the vicious price war. Now, let’s add the industry associations to the game as one of the parties, and build a model with operators who tend to increase prices as the other party (as shown in Table 3). This game model analyzes the impact of industry associations on operators’ price increase competition. In this game, operators try to increase prices in the market under the supervision of industry associations. Under the supervision of industry associations, operators’ price increases will be punished by the industry associations, resulting in a loss of C, while normal operation without price reduction will not result in any loss; for the industry associations, there is no gain or loss. If the industry associations choose the ‘no supervision’ strategy, for operators; when the price increase is not punished, it is equivalent to obtaining a positive benefit of E. The industry associations obtain a negative benefit of -D. When all operators reduce prices, the industry associations obtain a positive benefit of s.

　　After joining the industry association, the game model becomes a three-person game. Table 4 shows the three-person game model after the industry association is added to the price war game model described in Table 3. Operator X chooses rows, operator y chooses columns, and the industry association chooses the matrix, with two strategies: ‘supervision’ and ‘no supervision’. If the industry association chooses the ‘supervision’ strategy, it imposes a penalty C on operators who adopt the ‘increase price’ strategy, and for the industry association, it is a win-win situation, so the industry association’s benefits are all 0. For operators, the benefit value when adopting the ‘increase price’ strategy is reduced by C, as shown in the matrix in Table 4. If the industry association chooses the ‘no supervision’ strategy, the benefit value of operators remains unchanged compared to the original. When both operators reduce prices, the industry association obtains a positive benefit of S; when one operator increases prices, the industry association obtains a negative benefit of -D; when two operators increase prices, the industry association’s benefit value is -2D, as shown in matrix B in Table 4.

　　Due to the existence of one D and one 2D in matrix B, the Nash equilibrium solution of this three-person game model depends on the parameter C. Let H=8-C, F=6, 5-C, S=3, when taking a smaller C, if the following conditions are met: (1) H>F>Q>S (2) F>(H+S)/2, then (increase price, increase price, supervision) is the unique Nash equilibrium of this game model, and the operation of Online casino and How to find it is still trapped in the ‘prisoner’s dilemma’, unable to avoid the malignant price war. When the value of parameter C gradually increases, so that the above two conditions are no longer satisfied, (increase price, increase price, supervision) is no longer a pure strategy Nash equilibrium. When the parameter C is different, sometimes (increase price, decrease price, supervision) and (decrease price, increase price, supervision) are pure strategy Nash equilibriums, and sometimes there is no pure strategy Nash equilibrium, and in this case, price war can be avoided.

　　In general, the participation of industry associations is possible to avoid the malignant price war, but the premise is that industry associations must adopt monitoring strategies, and only when the penalty C for operators is sufficient enough will they break out of the ‘prisoner’s dilemma’ and avoid the malignant price war.

　　Four, Conclusion

　　In a market economy, healthy competition can promote its development, but malignant competition will only harm both parties, so it is necessary to effectively control the behavior of malignant competition to ensure its healthy and virtuous development. By applying game theory to analyze the competition of Online casino and How to find it in corporate acquisition prices, it can be concluded that to control the malignant price war in malignant competition, competitors should avoid falling into the ‘prisoner’s dilemma’ in competition, thereby avoiding the malignant price war. Or strengthen government regulation and supervision, so that they can promote each other in competition and achieve a win-win situation.

　　References

　　[1] Zhang Weiying. Game Theory and Information Economics[M]. Shanghai: Shanghai People’s Publishing House, 1996: 112-119.