Research On Concession Period Decision For Highway BOT Project Under Implicit Default Risk

Transportation infrastructure plays an important role in economic development and social progress,especially the construction of expressways plays an important role in the development of national economy.The 19 th National Congress put forward the grand goal of building a strong transportation country,which means that a new journey of highway construction will be started.The construction cost of highway project investment is relatively large,and the capital recovery period is relatively long,and the government is unable to bear high construction costs.The BOT model just relieves the government’s financial pressure and is widely used in transportation infrastructure.The concession period is a key decision-making factor in the BOT model.Its length is closely related to the interests of the government and the private sector.At the same time,it has a profound impact on the success or failure of the project operation.Therefore,it is determined that the scientific and rational concession period is to achieve win-win cooperation between the public and private sectors and ensure the smooth development of the project.The existing literature lacks the exploration of BOT projects under asymmetric information,and the information differences between the government and the private sector cannot be ignored.The asymmetry of information will induce the implicit default risk of the private sector,thus directly affecting the project quality.This paper focuses on the decision-making problem of concession period under the risk of implicit default,and uses the real option theory and evolutionary game theory to study how to determine the scientific and reasonable concession period to improve the operational efficiency of the project.The following aspects of research:(1)Contrasting and analyzing the traditional concession decision method and real option method,summarizing the limitations of the traditional method and the advantages of the real option method,in view of the uncertainty faced by the expressway,the irreversible,related and flexible characteristics of the project investment the applicability of real options in highway BOT projects is analyzed.(2)Based on the assumptions of the full implementation of the private sector,a Nash negotiation model for the decision of the expressway BOT project concession period without considering the risk of implicit default is constructed.The establishment of the basic model is divided into three steps: First,the decision of the concession period is transformed into the continuous stop problem of optimal time,and the optimal investment opportunity of the public and private sectors is obtained,and then the concession period feasible domain is obtained;then,the complete information dynamic game theory is utilized.The Nash negotiation solution model of the expressway BOT project concession period is established,and the Nash negotiation solution of the concession period is obtained.Finally,the validity of the model is verified by the example analysis,and the nature of the Nash negotiation solution is discussed.(3)In view of the information asymmetry in the principal-agent relationship,the supervision problem is introduced,and the single-client-dual-agent relationship between the government,the private sector and the regulatory agency is formed,and the highway BOT under the risk of implicit default is constructed.The Stackelberg game model for project concession decisions.There are four parts in the analysis: firstly,the three-party replication dynamic equation is established,and the stability of the evolutionary game is analyzed.Secondly,based on the previous chapter model,the average expected income of the private sector and the government is used as the utility function,and the concession period is obtained.Feasible domain;again,assuming that the government is the forerunner,the Stackelberg dynamic game model with incomplete information is constructed,and the negotiated solution of the concession period is obtained.Finally,the nature of the negotiation solution is analyzed by a numerical example,and the three-party strategy of the concession period to the game is simulated influences.Through the solution and analysis of the model,the conclusion is drawn: According to the real option theory,the investment timing of the private sector is converted into the continuous time optimal stopping problem.Under the assumption of complete compliance,a complete dynamic information game relationship between the government and the private sector is established,and a concession period Nash negotiation model is established.The size and volatility of the negotiated solution and the relationship of government negotiation power are obtained through analysis;when incomplete information is considered in the condition,by constructing the three-party evolutionary game between the government,the private sector and the regulatory body,the Stackelberg game model of the concession decision is established.The research shows that the equilibrium solution is affected by the volatility,the game government,the private sector and the regulatory agency.The evolutionary equilibrium strategy,namely,high-quality government management,strict supervision by regulatory agencies,and implementation of the private sector;,and further proposals for enhancing the quality of highway BOT projects.