Conflict and Coordination Evolutionary Equilibria in Multi-Stakeholder Urban Renewal Games Incorporating Loss Aversion

Against the backdrop of urban renewal and transformation in China, conflicts of interest among local governments, developers, and residents have become increasingly prominent. Traditional game models often rely on assumptions of complete rationality, making them inadequate for explaining residents’ resistance behaviors. This study integrates prospect theory with evolutionary game analysis to construct a three-party game model incorporating state-dependent gain, loss, and mixed perception modes among residents. By employing replicator dynamics, eigenvalue analysis of the Jacobian matrix, and MATLAB simulations, we systematically examine equilibrium conditions and evolutionary pathways. The results show: (1) the system has seven pure-strategy equilibria satisfying evolutionary stability; (2) local government strategy selection depends on the relative costs between compliant negotiation and forced promotion; (3) developer benefit sharing becomes a stable strategy only when penalty intensity exceeds the difference between benefit sharing cost and price suppression cost; (4) when loss aversion coefficients and loss perception sensitivity cross critical thresholds, steady-state transitions occur, becoming key psychological factors triggering conflict; (5) achieving an ideal win-win steady state requires coordinated efforts from multiple governance mechanisms. This research uncovers the underlying mechanism through which residents’ psychological cognition influences game equilibrium, providing theoretical support for optimizing government negotiation governance, improving developer regulation, and mitigating residents’ loss aversion.