| The Public-Private Partnership(PPP)model was pioneered by the UK and introduced in China in the 1990s.Between 2014 and 2016,the State Council and the Ministry of Finance,the Development and Reform Commission and other departments have issued a total of more than 70 policies and regulations,bringing the research and application to a climax.However,the problem of low participation of private capital existed at the beginning of the PPP model’s promotion in China,foreign scholars have studied PPP projects from the perspective of their successful operation,arguing that risk sharing and good cooperation between government and enterprises,etc.are key to the success of PPP projects.Domestic scholars analyse from both market and government perspectives,arguing that the market’s return on investment is a direct factor affecting the participation of private enterprises,and that government factors such as lack of government commitment,policies and regulations,risk allocation and government perceptions also have an important influence.To address this issue,scholars have studied the best government compensation measures from two stages: the construction and operation periods.Through literature combing and summarising,this paper finds that the existing research on low participation of social capital in PPP projects is mainly theoretical.Most domestic scholars summarise the factors affecting social capital participation on the basis of foreign research combined with the successful and failed experiences of PPP projects in China,while other scholars establish a game model between local governments and social capital to explore the low Fewer scholars have studied the causes of low participation from the perspective of social capital investment decisions by building a game model between social capital and social capital.In terms of government compensation,although many scholars have introduced real options in their studies to explore the government’s compensation for enterprises’ delayed options,scholars have mostly approached the issue from the perspective of ensuring reasonable returns for social capital,and the research from the perspective of total social welfare is not sufficient.In response to the above research gaps,this paper combines real options theory with game theory and considers a discrete two-stage real options game model in which both sides of the game are social capital,and studies its investment decision equilibrium from the perspective of social capital to explain the low participation rate problem.In addition,this paper introduces the Bertrand duopoly and monopoly models of the aggregate social welfare function to explore how some form of government intervention promotes social capital participation in PPP projects from a social welfare perspective.The main findings are as follows:(1)The two-stage real options game can achieve Nash equilibrium at different investment thresholds,i.e.double oligopoly,monopoly and no firm entry,and this conclusion holds under both the complete information dynamic game and the complete information static game.(2)The welfare of the duopoly and monopoly is greater than the welfare of no entry.This conclusion holds for both the complete information dynamic game and the complete information static game,but the policy interventions implemented by the government to improve welfare differ.In the complete information dynamic game,when the cost of investment is high enough,the government can improve social welfare by subsidising followers to induce them to invest after the leader has made the decision not to invest.Under a perfect static game,however,the government can no longer implement the subsidy in a timely manner.(3)The low participation rate can be explained by the complete dynamic game model: followers have a strong incentive to delay investment and thus not exercise their options when the cost of investment is high due to the uncertainty of future profits,while leaders,on the other hand,may face the market risk of competition from followers if they exercise their options early.Thus,both leaders and followers have a strong incentive to postpone investment.The low participation rate can also be explained by a complete static game model: when investment costs are high,policymakers are unable to implement subsidy policies in a timely manner and coordination failures lead firms to postpone exercising their options. |
