Game Analysis on Urban Tap Water Price under the Condition of Incomplete Information

Abstract

Affected by various uncertain factors, it is difficult for interest-related parties to obtain the complete information in the process of urban tap water price setting, which makes urban tap water price deviates from its actual value. To solve this problem, the paper firstly analyses different factors influencing price setting, then takes advantage of bargaining theory to discuss the game process between interest-related parties in urban tap water price setting. Finally, it establishes the calculation formula at the lowest transaction costs on the basis of price theory, which is the most acceptable way to both supplying and purchasing parties. With the example of Chengdu water pricing in 2010, the paper also validates the accuracy of calculation formula. It is concluded that the price calculated by the formula is in line with the actual situation and is conducive to shorten the process of water pricing, reduce the cost and improve the efficiency of management.