Game analysis of the central government, local government and local participants in the ownership restructuration

Abstract

National ownership structure is significant for promoting economic performance. In the last thirty years, the Chinese government implemented sustained reform to restructure the economic ownership, and most of the districts have finished the reform except some underdeveloped and remote areas. To facilitate the ownership restructuration of these unreformed areas, this paper derives a game between the central government, local government and local participants to analyze the players' strategies in different situations. The results show that without local government the game between the central government and local participants could not get the optimal solution; the local government's participation could break the dilemma and facilitate the ownership restructure process. With the seven propositions, we are hoping to bring a light to those local governments of underdeveloped and remote areas to restructure their local ownership.