Research on the Water Resource Manegement Based on Game Model

Abstract

It is a principal-agent relationship in the process of the implementation of water resource management in China, which causes the game between the different governments inevitably. Game theory is a method that explains the decision makers’ behavior under different conditions. Traditionally, in the finite repeated prisoner's game, the Nash equilibrium of the “prisoner dilemma” is the only equilibrium of prisoners. This result seems to be inconsistent with the true choices in the water resource governance. From analyzing the game model with complete information and incomplete information, it finds the Nash equilibrium under the different conditions between the central government and the local governments. In order to strengthen the cooperation of all levels of government, it is absolutely essential that the central government provide complete information and increase the punishment probability, improve the incentive mechanism and reform the local government's performances evaluation in the future.