Gao, R and Liu, J (2019) Selection of government supervision mode of PPP projects during the operation stage. Construction Management and Economics, 37(10), pp. 584-603. ISSN 01446193
Abstract
During the operation stage of public-private partnership (PPP) projects, investors may engage in opportunistic behaviour in pursuit of their own profits. In order to curb this kind of behaviour, this article analyses the selection of government supervision mode based on evolutionary game theory taking the perspective of government supervision. The results show that government supervision mode is closely related to the probability of identifying investors' speculative behaviour through outcome-oriented supervision. When the probability of identifying such behaviour is relatively high, the equilibrium strategy of investors and governmental supervision institutions is (not to behave opportunistically, outcome-oriented supervision). In contrast, if the probability is relatively low, there is no set of evolutionarily stable strategies (ESS); rather, a periodic behavioural pattern is formed. In this scenario, the strategies ultimately chosen by both sides relate to initial states and the payoffs of the options. Furthermore, determinants and some recommendations for government supervision are proposed, providing a reference for efficient governance.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | game theory; government supervision; opportunistic behaviour; public-private partnership projects |
| Index terms: | determinant, option, evolutionary game, investor, governance, supervision, game theory, strategy, profit, opportunistic behaviour, partnership |
| Subjects: | management, decision models, control systems, business, risk assessment, economic theory, decision analysis, economic analysis, sociology, partnership management |
| Topics: | Risk Management, Stakeholder Management, Project Management, Research Practice, Business Strategy, Organizational Design, Governance |
| Descriptive scope: | 3 PCT |
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