Project Factors And Path Of Investors’ Escalation Of Commitment In PPP Project

There are many risks in the development of PPP projects, and these risks influence the success of PPP project. According to the failure analysis of the project, related risk behavior takes place in more than half of the failure projects. And escalation of commitment (EOC) of the investor in PPP project can provide more advice to the decision of the PPP project investors and avoid or reduce the losses caused by EOC. The concept of the escalation of commitment first put forward by Staw in 1976, extensive research has been conducted in the field of psychology and behavioral science research, and major progress was made in the field of MIS.In this thesis, using the method of literature study and expert discussion, the related factors that promotes the decision maker’EOC were identified. These factors can be classified and calculated weighting factor according to factor analysis and the entropy value method through the questionnaire.Then, the second scenario simulation experiment is on the basis of the first experiment. The most important two factors are chosen from the above analysis and combined with big five personality. Then, the research have compared the difference between the PPP investors’ willing to continue the project and extra investment under four different situations and established the path model how the personality, confidence, the willingness to continue and extra investment interact. Results show that decision responsibility and project completion’s main effects are significant and the cross-effect too. Under high project completion, the decision responsibility has significant impact on the willingness and extra investment. The three personalities have different effects on the confidence of investors under the four situations and the confidence of investors will affect its commitment will and in turn, affects the level of capital.This thesis establishes the project factor system and the escalation path model. This may make great contribution to help PPP investor reduce its willingness and investment and provide theory basis and instrument. It can help investors make decision more rational and avoid unnecessary loss. This also provides a new way of thinking and research direction for PPP relative parties risk behavior study.