Decision Of Concession Period Of Ppp Project Based On Real Option And Game Theory

As a kind of financing mode which can effectively alleviate the government’s financial pressure, Public-Private-Partnership (PPP) is more and more popular in recent years. Now PPP has been applied to the field of infrastructure construction and public service. But there are still many problems on the method of deciding concession period.This thesis would be based on the general research for the decision of the PPP project concession period, and analyzed the Influencing factors of deciding concession period, and put forward the limitation of the existing decision methods and the advantage of the real option method, and constructed the decision model of concession period based on real option and game theory. At first, through the study of a lot of literature, this thesis summarized some factors effecting in all of the PPP project concession period, and classified them, and identified the real option in each factor. Then according to the different functions and interests of government and private, this thesis constructed the decision model of PPP project concession period based on real option and game theory. This thesis added the value of real option and coefficient of dividing the value of real option to the decision model. Finally, in a real case of highway, this thesis evaluated the security option value of traffic, and calculated the coefficient of dividing the value of security option according to the risk attitude of government and private, then calculated the concession period of this PPP project to verify the above model.Through the case analysis, it illustrated that the real option approach can deeply dig the potential value and strategic importance of the PPP project and make them displayed, and make private investors recovery of capital and profit faster, thus shortening the concession period, and make government enable to recovery the ownership of PPP project early to realize the maximization of social welfare as possible.