The Design of Incentive Mechanisms for the Interregional Public Goods under Asymmetric Information

We develop the incentive mechanism for providing the interregional public goods under asymmetric information. On the basis of Laffont and Martimort, we not only showed how the information asymmetry influences the efficiency of cooperation through the budget balance, incentive constrictions and participation restrictions, but also develop the idea that the Central Government can organize the interregional cooperation to provide the public goods combined with China's basic national condition. In addition, we proved that the occurrence of information asymmetry can be reduced by introducing the government subsidies function.