Research On Compensation Decision Of Advance Repurchase Of PPP Project Based On Prospect Theory

In recent years,Public-Private Partnerships(PPP)have been adopted world widely as an alternative key way to solve the contradiction between the imbalance of government expenditure and the increasing demands which involve the infrastructure and public service facilities.The PPP project has the functions of reducing government debt,improving the quality and efficiency of public service supply,and enhancing the power of economic growth.However,PPP projects are frequently forced into an early termination due to its complicated financing structure,high risk and long payback period.To most PPP projects,the early termination would cause the loss to the interest-related parties.The definition of early termination compensation of PPP project has aroused the concern of theorists and practitioners.In order to help the government and the private sectors to reduce the loss,how to establish a PPP project reasonable compensation decision is the important content of PPP project exit mechanism.Through the analysis of a large number of literature study and case,it is found that early termination compensation is the essential problem in early termination negotiation between government and private sectors,while both influencing factors and burden-sharing are the foundation of early termination compensation.By teasing early terminated factor of PPP project roundly,this paper clearly defines the responsibility of the various factors affecting the project early termination obligations.Considering that the different circumstances of the early termination of the project's burden-sharing will affect the composition of the termination compensation,it cannot be solved by the universal method.Based on this,this paper has commenced the study on the important problem about the early repurchase compensation when government and private sectors in the face of the early termination of PPP projects.The purpose of this paper is to reduce the fuzzy area of the existing early termination compensation research,and to carry out research on the early termination compensation for PPP projects when the government is facing public pressure to choose to repurchase PPP projects,and to implement the agreement prior to the cooperation of PPP projects.First of all,this paper discusses that PPP projects are in good operation,and the excess returns harm the public interest and cause public opposition,the round-robin bargaining game model is applied to solve the problem of early repurchase compensation decisions in these cases.And further considering the private sectors' loss aversion when faces the deprivation of operating rights,adopts the reference point theory and psychological accounts in the prospect theory as the theoretical basis,and constructs a bargaining game model based on the prospect theory for rotating bidding to promote government and private sectors.In the early termination of the project,a consensus compensation plan will be provided as soon as possible so that the project company can obtain reasonable and satisfactory compensation when the PPP project is early terminated.Finally,this paper takes the Highway PPP project as an example which government repurchases the project early,applies the early termination compensation decision model,and provides the theoretical support for the fair and reasonable solution to the early termination compensation,which provides the reference basis for the government department to calculate the compensation amount in the early termination of repurchase.