Investment Profits of a Dual Role Subject Based on the Operator-Investor in PPP Projects

doi:10.3969/j.issn.1007-7375.e17-3202

Abstract

Abstract: In Public-private partnerships (PPP) project, when operators act an investor by investing in the project, the scenarios of dual-role subject will be formed. However, there exists risk of speculation of the dual-role subject, which can result in serious conflicts of interest between pure-investors and the dual-role subject. Therefore, in order to discuss the dual-role subjects' optimal investment decision and profit under the scenario that operator becomes an investor, and reduce the risk of dual-role subjects' speculation in PPP project, the structure of investment profits and speculation behavior of the operators in the PPP project are analyzed based on the game theory. Meanwhile, the investment income models of operators are constructed under the four decision combinations. Then, the maximum benefit is analyzed based on different decision situations. Combining with a numerical analysis, it is concluded that the operator becoming an investor and exerting efforts and avoiding speculation can maximize the return on investment of private assets. Meanwhile, the results show that project company should establish dynamic contract price to reduce the risk of operators' opportunistic behavior.

Key words: PPP Project, Dual Role, Speculation Behavior, level of effort

CLC Number:

F282

LIU Jicai, LIU Jiaqi. Investment Profits of a Dual Role Subject Based on the Operator-Investor in PPP Projects[J]. Industrial Engineering Journal , 2017, 20(6): 1-8.

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