Abstract: By adopting the real option method, firstly, the model of government guarantee subsidization efficiency is setup, the determinants of government guarantee subsidization efficiency are analyzed and the relationship between the option value of government guarantee subsidization and guarantee subsidization intesity is discussed. Then the game model of government and enterprise's subsidization efficiency is built, the game behaviors of government and enterprise in the two phases of technological innovation are discussed, and the important determinants of government subsidization intensity are analyzed. The following the conclusion is drawn, that is, the investment balance of government and enterprise is that the average profit of the project investment is equal to the marginal profit. Finally, from the perspective of the government, the suggestion on government subsidization intensity is given.

Key words: government subsidization, technological innovation, subsidization intensity, real option, game theory