Abstract: The formalized and unstable cooperation among China's local governments reflect a dilemma between regional common interests and local interests. Analysis of Prisoner's Dilemma indicates the root of dilemma is the existence of opportunism and the temptation of short-term interests in cooperative process. Analysis of Stag Hunt Game and Iterated Game indicates that the increase of betrayal cost and incentive of long-term interests make cooperation possible. Therefore, the in-depth development of local government cooperation calls for the development of long-term and stable cooperation, the cooperative guidance and incentive of central government, and the establishment of systemic cooperation between local governments.