Reserach On The Hold-Up Problem Of Bot Project

As asset specificity, information asymmetry and contractual incompleteness, the hold-up problem is a common phenomenon in the BOT project, which lead to project’s implementation effect can not realize. In this paper, the BOT project’s hold up problem mechanism, participants’behavior, and measures to solve hold up problem were studied.This paper analyzed the mechanism of hold up problem in the BOT project. Product’s buyer reduces product’s price through renegotiation, acquire quasi rent to hold up the project company, when the project company predict its behavior will reduce ex-ante investment of technique and capital, and lead to the loss of project’s social benefit. Aiming at this problem, this article discussed hold up behavior both of the project company and product’s buyer.In view of the project company’s hold up behavior, it was discussed respectively in the two cases that the participant was information symmetry or asymmetry. The analysis of project company’s hold up problem in the situation of information asymmetric showed the relationship between project company’s level of efforts and government supervision cost; When information asymmetry, project company has to choice between high and low technology, hold up relationships in the project company and government was studied in the two cases, the paper gave the critical condition and price range in price’s renegotiation, and analyzed project company’s technology investment decisions. Product buyer’s hold up problem was discussed in the situation of reducing level of efforts or not. Through comparative analysis concluded that project company by reducing the level of efforts to increase its benefit, but it reduces the property advantages of renegotiation, moreover, raised the probability of product buyer’s hold up behavior and external choice.This article summarized the hold-up problem in BOT project, set up a decision model based on the hold-up problem. Project company’s revenue is mainly depend on concession period and product’s price, once the price changes or the concession period is not reasonable, project company will be held up, therefore, the concession period and product price have become the focus of both sides. This paper established concession period decision model based on the hold up problem of BOT project by the introduction of price adjustment mechanism, the concession period by solving this model ensures the project company’s earnings, so it is more close to the actual situation, and can prevent project company’s opportunism behaviors to hold up government.Based the analysis of the BOT’s hold-up problem, researched the hold up problem of BOT project by game theory, and established the matrix benefit of game based on the probability of different decision-making behavior, the relevant contents are as follows.First, considering whether the project company takes hold up behavior or not is influenced by its hold up benefit, so the earnings matrix of game government and the project company is established by setting project company’s hold up revenue function, the expected revenue function is gained by the matrix, thus can discuss the optimal decision under different conditions.Secondly, project products’ buyer generally is a government sector (entrepreneurship) that usually is project product’s monopolistic consumer, it holds up the project company by product price’s renegotiating. This paper established the matrix benefit of game, which were based on the price’s renegotiation between product buyers and project company respectively when government supervises and doesn’t supervise. The necessity of government supervision was verified, decision-making behavior was discussed under different conditions in the product price’s renegotiation.Third, the hold up problem of BOT project construction period and operation period were discusses by introducing the effort level of project company, the critical condition and optimal strategy of participants’ hold up behavior under different conditions were given. The result was coincident with the game analysis by building the project company’s hold up revenue function.Fourth, the hold up problem in the BOT project’s government guarantee was discussed combined option theory. The game analysis of the minimum-style guarantee, upper and lower limits-style guarantee and upper and lower limits-style guarantee in the times of proportion’s hold-up problem were given respectively. This paper obtained the advantages and disadvantages of three guarantees, the optimal decision of both sides and the measures to solve the problem of hold up were given.Finally, by summarized paper’s analysis and results, the measure that can solve the hold up problem of BOT project are participation motivation, risk sharing and punishment mechanism.