How public investment promotes growth — Under cooperative game framework

A public investment model based on cooperative game is established to analyze the public investments made by local governments. The model seeks to increase per capita income and decrease per capita income gap. Shapley value method is applied to solve the model. The principle of Shapley value is that one´s payoff should be equal to his/her contribution. Experiment research demonstrates that the contribution rate of public investment may vary greatly from the public investment proportion.