Study On Horizontal Collusion And Multidimensional Direct Mechanism Design In PPP Project Bidding

Since the beginning of the opening up policy,because of the social development and rapid economic growth,the demand of electricity,transportation,economical housing and infrastructure in our country is ever-growing.However,the huge development funds,long-term capital recovery cycle,and the low level of management and operation,makes the capital-raising,designing and operation face more troubles.To promote the construction of infrastructure,the State Council issued the documents related to the promotion of PPP mode,so PPP model has become the focus.However,in the actual bidding process,the private sector as a risk neutral person will have opportunism tendencies in pursuit of maximizing their own interests.Driven by the interests,the private sector bidder will conspire with other private sectors,namely,crosswise collusion,which then damages the interests of the tenderer while obtaining excess returns.In this paper,through a bargaining model of 3 participants,the mechanism of horizontal collusion between private sectors in the process of PPP project bidding is analyzed.Different from the bidding for traditional infrastructure projects,the public sector needs to consider the integrated management capabilities and the submitted project proposal of the private sector during the PPP project bidding process,and therefore PPP project reverse auction is multi-dimensional-information based on a series of quality-related indexes in construction and operation as well as concession period.However,the current researches on multi-dimensional information reverse auction mainly study projects of traditional development mode from the dimensions such as quality and price or franchise period and cost,while it is difficult to truly reflect the PPP project tendering with models.Besides,the public and private sectors may make joint investment in PPP projects,but all the current relevant researches have assumed that the projects are funded by one party,i.e.,funded by the public sector or the private sector,and ignored both the diversified forms of cooperation of PPP projects and the impacts of project financing program on the tendering results.Therefore,how to better reflect PPP project bidding with models,in order to help the public sector develop reverse auction mechanism in a more scientific manner,has become a new topic of studies.And how to consider more comprehensively the impacts of financing program on the tendering results is also a new topic of studies.In addition,the multi-dimensional information has made the incentive situation of PPP projects more complex,and the current researches on multi-dimensional information reverse auction mechanism are mainly based on the "black box" principle,and reducing the dimensions of information based on relevant assumptions lacks practical significance.Therefore,how to scientifically reduce the dimensions of information and simplify the incentive situation has become a new research topic.Moreover,a superior mechanism design must be Nash equilibrium,and could be implemented.The current researches on the mechanism implementing of multi-dimensional-information reverse auction focus on the scoring function exchange,therefore how to design a different reverse auction mechanism is also a new research topic.First,this paper introduces the PPP model,such as the definition of PPP projects,the advantage and characteristics of PPP Project,the operation procedure and so on.And we discuss the contractual relation between the participants and the potential risks of projects.Then the paper introduces the process and types of PPP Projects,and summarizes the methods of bid evaluation,as well as process.What's more,the article has some comparison with traditional projects and PPP Projects.Secondly,based on a simple bargaining model,the existence and mechanism of the horizontal collusion of the PPP project are discussed.By calculation,the optimal bribe function of private sector under the equilibrium path is obtained.It also discusses the sufficient and necessary conditions for the horizontal collusion of the PPP project.Finally,based on the theory of mechanism design and revelation principle,this paper establishes multidimensional auction model of infrastructure construction project under PPP model.Reverse auctions of PPP projects usually require the bid to specify several characteristics of quality and concession period to be fulfilled.This paper sets up the summary function of generalized quality,which contributes to reduce dimensions of information,thus the multidimensional reverse auction model of PPP project can be replaced by the two-dimensional direct mechanism on the concession period and generalized quality.Based on the theory of revelation principle,this paper describes the feasibility conditions,equilibrium solution and generalized quality requirement of such mechanism,considering the influence of variable investment structure.Moreover,this paper builds two feasible multidimensional reverse auctions,such as adjusting the scoring function and establishing a special reverse auction rule,for implementing the mechanism.The analysis shows that in such two reverse auctions the optimal allocation can be achieved,the social benefit under the incomplete information will be maximized and the private sector with the highest integrated management level wins the bid.