Research On The Incentive Mechanism Of Brownfield Redevelopment

In recent years, the problem of brownfield is becoming more and more serious in our country.Because the redevelopment cost of brownfields is very high, the government cannot afford such a large expense, so attracting social capital to enter it is better way to the solve this problem. The research object of this paper is government and real estate developer in brownfield redevelopment. However, the ultimate goal of government and real estate developer is not the same, the government takes the social welfare maximization as the goal, while the real estate developer takes the profit maximization as the goal, o the government must take measures to motivate the developers.This paper is based on incentive mechanism, principal-agent mechanism and reputation mechanism. Standing in the perspective of the government, discussing how to incentive the developers involved in redevelopment of brownfields. In order to attract the developers to participate in the redevelopment of brownfields, this paper designs the " fixed subsidy+sharing economic benefit " incentive model. We take the following order to build model. Firstly, regardless of the government supervision, the developers and government share economic benefits of the brownfields redevelopment project, but the government get the social benefits, only use "fixed subsidy+sharing economic benefit" incentive model. Secondly, to improve the level of the developers of governance efforts, introducing the process of government supervision and redevelopoment standard, using "fixed subsidy +standard punishment+sharing economic benefit" incentive model. Finally, introducing reputation system, considering the reputation influence of the developers, using "fixed subsidy+standard punishment+sharing economic benefit+reputation mechanism" incentive model.Based on three different incentive model, we compare and analyse the developers optimal effort level, economic benefit distribution coefficient, the largest utility function of government, developer unit effort economic benefit, social benefit transformation coefficient and risk perception of developers is the main factor that affect the level of developer effort. Considering the efforts of the government supervision and introducing the reputation mechanism of developers both can promote the effort level of developer, and economic benefit distribution ratio can be reduced. Reputation mechanism and government supervision can be used as a complementary means to incentive the developers, but reputation mechanism has a critical value. The developer has a certain requirement to reputation mechanism manifestation. According to the analysis result of the two models, this paper puts forward six recommendations on brownfield governance policy. Firstly, taking the combination of the fixed subsidy and sharing economic benefit. Secondly, According to the function partition set up brownfields governance standards, according to the treatment result to establish a mechanism to punish. Thirdly, setting economic efficiency distribution coefficient. Forthly, Build a reputation mechanism for developers. Fifthly, setting up a special brownfield governance and supervision agencies. Finally, Perfecting the financing mechanism of preferential policy for developers.