Abstract

The economist J Tirole has obtained the Nobel Prize for Economics by the theory of new regulation economics, which provides a new way for the regulation of various fields. Based on this theory, the new regulation of water resources eco-compensation in watershed is analyzed. In view of the information asymmetry between compensation subject and compensation object, a new method of determining compensation standard is put forward by using the new regulation model. Taking the eco-compensation of the water source area of Shitou River as an example, the application mode of the new regulation is explored. Firstly, information rents can be eliminated. Secondly, the dynamic and accuracy of the compensation standard can be improved, and government budgets will be more accurate according to the interval range of compensation funds. Thirdly, the overall welfare level of the society can be guaranteed.

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