Based on the prospect theory, this paper establishes an evolutionary game model of government and construction units for the problem of poor subsidy construction of government-subsidized construction units and uses the replication dynamic equation to analyse the strategic choice of evolutionary games. The research shows that the evolutionary game system of the construction unit and the government cannot meet the government incentives, and the construction unit also adopts the stable state of the prefabricated building. In the long run, the government subsidy cannot determine whether or not the construction unit will adopt the prefabricated building, and it is the construction cost of the prefabricated building that determines. Therefore, the government's work should shift from subsidies to targeted incentives forconstruction units to reduce the cost of construction of prefabricated buildings. The unit levies an environmental tax and appropriately restricts the income from the traditional cast-in-place construction units, and, on the other hand, it increases the popularization of low-carbon and environmental protection of the fabricated buildings, so that more consumers can recognize the environmental benefits brought by the assembled buildings. It provides a reference for the government to promote the development of prefabricated buildings.

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