Game Analysis of Present System for Determination of Supervisory Prices in China

Game process for action tactics between the government and quality supervision organizations was analyzed with principal-agent theory. The analysis of the probabilities under different supervisory efficiencies suggests that the government needs to adjust the supervision policies and design effective incentive mechanism, guiding supervision organizations to strengthen their competitive powers by enhancing technical competence and realize the maximum social and environmental benefits for the government and economic returns for supervisory organizations.