Abstract
Based on the current situations of China's salt monopoly system, this paper establishes a static game model of complete information to analyze the "incentives" to illegal salt trafficking. Using the thoughts of “trigger strategies” in infinitely repeated games for reference, this paper designs an institutional arrangement to suppress illegal salt and puts forward a number of illegal salt suppression strategies, such as to build up a reputation for “a strong salt regulator”, to enhance the efficiency of supervision and reduce the cost of investigation, to strengthen the penalties for trafficking in illegal salt, to implement different degrees of supervision and investigation on salt-producing enterprises with different marginal costs of production and so on.
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