Abstract: Since the start of the reform and open-up policy in China，the development of the urbanization of rural population has gone through four stages：strict control of population flow，control of blind flow，regulated flow，and fair flow. Liberated from traditional institutional restraint，rural citizens come to cities，changing not only their jobs but their status as well，gaining the basic right for freedom as human beings and more importantly the means to pursue their own happy lives. This paper，from the perspective of evolutionary game theory and the theoretical framework for trading the right of freedom，provides the basic logic for the study of the institutional change in China’ s rural population urbanization. The analysis shows the institutional change is actually a process of game playing between all parties in“trading their rights of freedom” . In different periods and exterior conditions，parties with different interest demands take appropriate strategies to balance the actions of game players and eventually promote the institutional change.

Key words: urbanization, institutional change, rural population flow, trading of right of freedom