An analysis on the government-enterprise game in the case of urban pollution treatment

With the continuous economic and urban development, urban water pollution issue looms large, enterprise sewage problem becomes a topic of more and more universal concern. The government both serves for conservation of ecological environment and promoting economic development, however the enterprises always neglect urban environment pollution during pursuing the goal of profit maximization. This article has analyzed the government and enterprise´s behavior under asymmetric information, and built up a two-stage game model between the government and enterprise´s, proposing a set of urban water pollution incentive mechanism.