is the marginal negative effect, is the average pollution rate of unit water, c is the cost of unit water, is the abatement cost of unit waste water, the penalty and are water resource manufacturers and administrative water resource regulators, respectively, is the reward of water resource manufacturers, r is the reward for the administrative water resource regulators, and are the regulated costs, is a fixed penalty for administrative water resource regulator, is the threshold of water intake, is the quantity of excess water intake of party A and is the quantity of normal water intake of party A.