Aiming at the free-riding problem in team incentive, this paper designs a dynamic incentive mechanism based on implicit side contract with dynamic game theory by introducing the reasonable assumption that there is horizontal monitor in team production. The theoretic analysis indicates that the dynamic incentive mechanism, in which a strict group incentive compatibility contract is taken at the first stage and an individual incentive compatibility contract is taken at the second stage, can implement team cooperation uniquely in the general condition of risk aversion and stochastic production by only two stage repeated game.