LAUSR

Abstract Constructing a game theory framework between local government and the central government and developer for an objective evaluation on the behavior of local government land supply real motives under the background of macro regulation and control. The paper holds that local government seeks game balance with the central government and developer in order to satisfy the maximization of its own interests. Under the condition of the central government's effective incentive, the local government will take positive policy game strategy if prior probability to judgment on optimism type of developer lowers than the critical value. Then we apply panel error correction model for testing on local government land supply behavior motivation. The empirical results show that the local government has considered the supply and demand situation in the decision-making of land supply, and partly relieved the contradiction between supply and demand in the housing market. Meanwhile the empirical analysis also thinks that local government has many reasons and motivation of inaction, which will interfere with the central government's macro-control on the housing market.