Abstract: In PPP projects, the government's incentive strategy is an important mechanism to restrain the social capital's speculation that does not pay effort. To analyze the replication dynamics and evolutionary stability of both sides in the decision-making interaction, and improve the incentive mechanism of the government in the PPP project, based on the game theory, the payoff matrix and the dynamic evolutionary game model of the interaction between the strategy of government incentive and social capital effort behavior are constructed. Through the discussion of model parameters and Matlab numerical simulation, it is found that strategies (not giving incentive, and not making effort), (not giving incentive, but making effort), (giving incentive, and making effort) may become evolutionary stable strategy, when the different parameter is set in the system, reflecting individual behavior of decision-making has a certain influence on group's behavior decision. The results of numerical simulation show that when the social capital does not pay effort, the government will not definitely give an incentive, and the government prefers the incentive method of afterwards reward in the incentive strategy. Therefore, in the process of PPP project operation, the government should give appropriate incentives to social capital before the behavior occurs, so as to make social capital willing to make efforts, and in the later decision-making process, according to the level of efforts and performance of social capital, the incentive method of afterwards reward is adopted to supervise social capital. The research findings provide suggestions for setting up the incentive mechanism of PPP project reasonably.

Key words: PPP project, government incentive, social capital effort, evolution game, simulation