Study On PPP Project Cooperative Game Model Based On Prospect Theory

In recent years,with the quickening pace of urbanization in China,more and more local governments begin to shift the focus of investment to infrastructure construction,however,infrastructure construction is a complex project,which takes a long time and costs a lot of money,and the government bears a lot of financial pressure.Therefore,some local governments have started to take a different approach and turn to PPP projects in cooperation with social capital,to relieve their financial stress.The PPP model is an innovative mechanism for infrastructure construction projects.For the government,on the one hand,it improves the supply efficiency of social public services,on the other hand,it saves financial funds for the government.For Social Capital,the PPP model provides new and good investment opportunities for social capital,so the PPP model is favored by the society and the government.At the same time,many scholars at home and abroad begin to study the mechanism of risk sharing,the mechanism of benefit sharing and the process of game in PPP project.This paper summarizes the domestic and foreign scholars' research,and thus finds that in the traditional game research of PPP project,there is a premise assumption that is completely rational,but in PPP project,due to the complexity of the project,many stakeholders and other factors,as a result,this hypothesis can not be satisfied,there is a deviation between the research and the actual game process in PPP projects,and the prospect theory is based on the characteristics of bounded rational people,which is quite useful in explaining some phenomena in life that are contrary to the expected utility,therefore,this paper introduces the prospect theory,based on the analysis of PPP project,the game in PPP project is studied based on limited rational hypothesis,and the behavior of the participants is predicted,this paper attempts to explain some phenomena in the Game Theory of PPP project which do not accord with the actual situation.In this paper,we find that the traditional game model and the improved game model need different conditions in order to achieve the combination of the Social Desire(variable subsidy,high-effort cooperation),the traditional game model needs simple conditions,while the improved game model takes into account the existence of reference points and the weight of probability,and needs to meet the more demanding conditions.In addition,the traditional game model can reach the final equilibrium,because of the frame effect,the improved game model can not reach the unique equilibrium,the public and private sides can not reach the final equilibrium,more in line with the real game process.In addition,in order to achieve the desired game equilibrium,the government can take certain measures,such as setting a reasonable incentive and punishment mechanism in the project,and rewarding the private sector when the project performance is excellent,however,when the performance of the project is not up to expectations,the private sector should be punished accordingly,and secondly,the determination of the performance benchmark and the amount of reward should be set reasonably,so as to form a good incentive for the private sector,finally,the government and the private sector in the process of benefit-sharing,the two sides to determine a reasonable proportion of benefit distribution.