Opportunistic Behaviors Of The Private Facing Early Termination Of Public-private Partnership Transport Projects

PPP(Public-Private Partnership)has been widely implemented in the transport sector.However,it is not unusual for a PPP project to be early terminated because of the features of the PPP Projects and the macro environment,which will affect the profit of participants,inducing the private partner in PPP projects to take opportunistic behaviors.Opportunistic behavior is a major source of transaction cost,so it's necessary to do research on its emergence and countermeasures,in order to protect the interest of government and the public.To begin with,the thesis summarized the basic characteristics of transport PPP projects and Transaction Cost Theory,concluding the reason for emergence of opportunistic behaviors,including the interest conflicts,bounded-rationality,opportunism of partners,the asset-specificity,low frequency,uncertainty of the transaction,the information symmetry,uncertainty of environment,and the incompleteness of governance structure.Then,this thesis analyzed 31 early-terminated transport PPP Projects around the world using the method of case study and extracted 27 factors during the four stages of a PPP project,consisting of the inaccurate forecast of demand,construction delays,the competitive project,and so on.Also,the thesis has concluded the consequences in aspects of economy,politic,utility and the cooperation relationship,as well as four types of terminating events such as government default,developer default,force majeure and uninsurable risk events,and termination for convenience of government.What's more,the common compensation calculating method was refined from the real cases,including that of different terminating events and consequences.Thirdly,according to the relationship between the government and private partner,a game theory model was built.Under the hypothesis of the Prospect Theory,the private partner's Nash equilibrium in the static games of incomplete information was analyzed,providing evidence of deviation from mixed-strategy equilibrium to pure-strategy equilibrium.And the different expectation of termination compensation can affect the choice of the private.Fourthly,by exploiting the evolutionary game theory,the thesis discussed theexistence of the evolutionary stability strategy in the games between government and the private under the hypothesis of Prospect Theory.Finally,the thesis has studied influence of the different penalty strategies to the stability of the game comparing to that under the expected utility theory.For instance,under the hypothesis of bounded-rationality,the effect of dynamic penalty strategies is limited to the termination expectation of the participants.Based on this,the thesis provided some relative advice to government in practice.For example,increasing the amount of fine for opportunistic behavior is not always a good countermeasure.