Incentive Mechanisms Of PPP Projects With User Involvement And Uncertainty Property

Public-private partnership(PPP)projects such as underground utility tuennels,underground logistics systems and freight railways pocess productional corporate users with a specific scope,a limited number,and strong bargaining power.For these types of PPP projects,the attitude of users significantly determine the success or failure of projects.The change and alteration of external environment,the complex relationships and interdependences within PPP projects,and the dynamic and diversification of stakeholder relationships have made PPP projects face increasingly significant and widespread uncertainties.With the aim of reducing the uncertainties of PPP projects,the practitioners had begun to explore the PPP model of user involvement.To be involved means that users serve as the shareholders of special purpose vehicle through equity investment,participate in PPP projects throughout the life cycle,and establish communication,coordination and information sharing channels with constractors through clarifying user needs.With the help of principalagent theory and evolutionary game theory,this study discussed problems of the ability identification of the private partners and the optimal effort incentive issues considering user involvement and uncertainty.Details are as follows.First,taking the dual information asymmetry between the public and the private into account,a basic incentive model and an incentive model with user involvement were established to explore the ability identification of the private partners and the optimal incentive mechanism.The results have shown the following.The incentive mechanism with user involvement :(1)Produces a "catfish" effect by introducing users to realize further exploration of the potential and value of high-ability contractors;(2)Gives the consortiums a synergistic premium in order to achieve sufficient incentives for the high-ability consortiums;(3)Whether inhibit the speculative behavior of the contractors and users in the construction process depends on whether the collaborative premium can cover the increased variable costs caused by information sharing.Second,the incentive models for PPP projects with demand uncertainty and unforeseen uncertainty were respectively constructed,and the information indentification and best effort incentive issues of the contractors under demand uncertainty and unforeseeable uncertainty were discussed.The following results are summarized.(1)The players bearing the main operation responsibilities of the PPP projects require higher shared revenue to hedge against the uncertainty of the projects’ user demand;(2)The influence of fixed cost coefficient on the optimal revenue sharing ratio of low-ability contractors under unforeseeable uncertainty depends on the ability gap between the high-ability contractor and the low-capability contractor;(3)The relationship of the optimal revenue sharing coefficient of the high-ability contractors under certainty and uncertainty when the users are not involved should be satisfied is related to the relative relationship between the government and the contractors’ operational contribution coefficient.Third,the incentive models with user involvement under demand uncertainty and user involvement under unforeseeable uncertainty were constructed respectively,and the behavioral laws of the private scetors and the formation of incentive mechanisms under the interaction of user involvement and uncertainties were discussed.The research conclusions show the follows.(1)The relationship between the optimal revenue sharing coefficient of high-ability contractors and high-ability users under certainty,demand uncertainty,and unforeseeable uncertainty should be afterwards determined based on a reasonable measurement of the comprehensive cost coefficient of these two players.(2)The optimal incentive mechanism with user involvement under the demand uncertainty establishes an "immune barrier" aiming at low-ability private partners,which hinders the impact of lowability private partners on the shared benefits of high-ability private partners.(3)The optimal incentive mechanism with user involvement under the demand uncertainty strengthens the benchmarking effect of high-ability the private partners,and encourages the low-ability private partners to imitate and learn from high-ability private partners.Last but not the least,aiming at the characteristics of users,taking the utility tunnel PPP projects as examples,an incentive envolutionary game model was constructed to disscuss how to encourage users to participate in PPP projects.The findings are as follows.There are upper and lower thresholds on the users’ shareholding ratio,which will affect the users’ game strategies.The government subsidy rate,price discount rate,and the probability of enjoying price discounts are positively correlated with the thresholds,and the capital ratio is negative with the thresholds.The priority should be gave to government subsidies,followed by reducing capital ratio and increasing capital appreciation rate,and followed by price discount rate and synergistic rate.The following three innovations of this study are included.(1)A theoretical model of "user involvement" is constructed for the uncertainty of PPP projects with corporate users.User involvement means that users serve as shareholders of special purpose vehicle through equity investment,participate in PPP projects throughout the life cycle,and establish communication,coordination and information sharing channels with constractors through clarifying user needs.(2)Unforeseeable uncertainty is introduced into the principal-agent model of PPP projects.Combined with the characteristics of unforeseeable uncertainty,for the contract changes that may be involved after the occurrence of unforeseeable uncertainty,the traditional single-stage principal-agent model is extended to a two-stage principal-agent model,that is,the private partners select the contract type at the initial stage of the projects to report their abilities,choose whether to accept contract modifications after occurrences of unforeseeable uncertainties.In addition,the contingency efforts of the contractors and users after the occurrences of unforeseeable uncertainties are also incorporated into the models.(3)For quasi-operational PPP projects with legal corporate users,an incentive model for users to participate in PPP projects is constructed.According to the difference of user costs,users are divided into high-cost users and low-cost users,and an incentive model for users to participate in PPP projects is constructed.The impact of government subsidies,capital ratio,capital appreciation rate,price discount rate,the probability of enjoying the price discount and the coproduction rate on the behavior strategies of high-cost users and low-cost users are discussed.