The stability of trans-boundary water pollution control alliance is the key to effectively alleviate the problem of water resources shortage. In this research, we use the KMRW reputation model of incomplete information repeated game to analyse the stability of cooperation in trans-boundary water pollution governance, especially, the analysis of the compensation factors influence on cooperation and its mutual restriction of penalty factor. The results of this study suggest that in order to alleviate cooperation opportunism arising from the asymmetric information among parties involved in trans-boundary water pollution governance, the active party should bind cooperation time as long as possible, and the inactive party should input proper signal display. In order to maintain the stability of the alliance in a different situation, we innovatively introduced compensation factor into the reputation model to analyse its impact on cooperative alliances and their mutual restriction with penalty factors and subsidy factors. Hopefully, this paper could give some suggestions to the parties of the trans-boundary water pollution control alliance to make this cooperation more stable.
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