Abstract: The food safety issues are frequent emergence because the quality is difficult to be observed and detected. In order to solve the problem, it is necessary to design the market competition environment which is encouraging manufacturers to expose the illegal behavior in the production of toxic food. By developing incentive compatibility model, food safety issues are analyzed under the market structure of Cournot competition, Stackelberg competition, the price leader model and differential competition. These studies show that the price competition is more beneficial to improve food safety than Cournot Competition. When the level of product differentiation is high, the price competition is more conducive to improve food safety. Consumer demand elasticity only plays a role in price competition.