Research On The Prevention Of Adverse Selection And Moral Hazard Of PPP Model With Asymmetric Information

Public infrastructure is the cornerstone of the economical development.In order to reduce the pressure of government financial,based on the domestic practice and learn from international successful experience to promote the Public-Private-Partnership(PPP)is the country’s major task of economic reform.However,PPP model has the characteristics of long life cycle,large investment,complex contract relationship and so on.The social capital as the bidder of the PPP project and the builders of the project company is very important to the smooth implementation of the PPP model.But because of the government’s lack of information on social capital,the government could not choose the excellent social capital in the bidding stage,which resulting in the adverse selection before the signing of the contract and the moral hazard after the signing of the contract.In view of this,based on the government,it is of great theoretical and practical value to study the prevention of adverse selection and moral hazard in PPP model.The main contents of this paper are as follows:(1)In the extensive reading of the relevant literature on the signing of PPP model contracts at home and abroad,the paper introduces the theory of asymmetry information and combines the quantitative and qualitative analysis methods to analyze the adverse selection problems before the contract is signed and the moral hazard after the contract is signed.(2)In the bidding stage of PPP model,the paper analyzes the causes,harms and measures of adverse selection problems.Then proposes a model of information transmission based on the ratio of the quality of public service provided by social capital and the cumulative present value of life-cycle cost combined with comprehendsive score method and the evaluation method of value engineering.And the Pareto separation equilibrium theory proves the model can be used as the basis for the govern-ment to select suitable social capital.At the same time,putting forward the incentive model based on the self-reported cost target value and the dynamic compensation model based on the demand risk in order to ensure the authenticity of the information provided by the social capital.The establishment of the two models increases the integrity of the contract and improves the accuracy of the information transfer model to effectively discriminate the outstanding social capital.(3)In the implementation phase of the ontract in PPP model,the paper analyzes the causes,harms and measures of moral hazard problem.Then analyze the income of PPP model,and establishe the moral hazard analysis model to calculate the optimal level of the project company when the total income of the PPP project is the largest.And analyze the influence of the variable factor on the optimal effort level with the MATLAB program.At the same time,establish the income matrix of the incentive and effort of the government and the project company to analyze the equilibrium stability strategy of the system under different income conditions.The research results can provide guidance for the government to promote the project company to pay high effort.(4)Finally,an example is given to analyze the operability of the model and provide some reference value for the government to prevent the adverse selection and moral hazard caused by asymmetry information.