A game theory approach for the allocation of risks in transport public private partnerships

Medda, Francesca

doi:10.1016/j.ijproman.2006.06.003

Cited by 258 publications

(140 citation statements)

References 18 publications

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“…The first one is summarizing and refining the theoretical principles of RA, and its purpose is to guide the contractual arrangements of RA [4][5][6][7], but other studies have found that there are some deviations between the theoretical principles and the practical operation of RA, or even completely opposite [3]. The second one focuses on the quantitative studies of RA decision, and its main idea is to construct quantitative models of RA decision by AHP, fuzzy mathematics, game theory and other mathematical tools [8] [9]. In short, the normative research results showed increasingly out of touch with reality, and the quantitative studies of RA decision maybe more active which reflects the development trend of RA decision in the future.…”

Section: Research Status and Trends Of Ra In Engineering Managementmentioning

confidence: 99%

A Decision Model of Risk Allocation for Urban Rail Transit Projects under Public-Private-Partnership Model: A Research Framework

Zhao¹,

Jiang²,

Li³

2016

dtssehs

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Abstract. In the field of supplying urban rail transit projects, Public-Private-Partnership (PPP) model is an important implementation approach in China, but the project management performance is still not satisfactory owing to lack of resonable and quantitative risk allocation models. At first, on the basis of literature review, this paper puts forward a logical framework of study on risk allocation model for the urban rail transit project under the PPP model. And then, it deconstructs the main research points which include collecting and analyzing the influencing factors of project risk allocation, constructing the theoretical framework of risk allocation decision, constructing and verifying the quantitative risk allocation decision model. Finally, the paper provides several methods for this reseach theme. The viewpoints of the paper have some methodological significance for theoretical research and practical work on the risk allocation decision of the PPP project.

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Section: Research Status and Trends Of Ra In Engineering Managementmentioning

confidence: 99%

A Decision Model of Risk Allocation for Urban Rail Transit Projects under Public-Private-Partnership Model: A Research Framework

Zhao¹,

Jiang²,

Li³

2016

dtssehs

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“…As risks are shaped by the perspectives from which we look at them, some studies have investigated this aspect such as [40,41,52,53]. Quantitative analysis and tools to assist with decision-making in risk allocation include game theory as a modelling and analysis framework-see, for example [17].…”

Section: General Framework For Ppps: a Solution Algorithmmentioning

confidence: 99%

“…To the best of our knowledge, contributions within this analysis framework make use of the Cardinal game theory modelling framework to analyse various decisions in PPP projects. To be more specific, the various decisions in PPP projects that have been addressed so far include bidding price [11], bid compensation for projects with costly bid preparation [12]; concession period-also referred to as stipend or honorarium [13][14][15]; costs and benefits allocation [16], risk sharing and allocation [17]; resource pricing and allocation [18], resource value increment allocation [19], royalties and subsidies negotiation [20], negotiation of changes in output-based specifications [21] and claims, financial renegotiations, and opportunistic behaviour [22][23][24]. To be the best of our knowledge, so far the decision problem concerned with the selection of the private sector partners has not been addressed yet within a game theory framework, although-at least conceptually-game theory is the most suitable analysis and solution framework as, by design, it allows one to take account of both the public sector perspective and the public sector perspective, and hence, it provides a more realistic solution for implementation.…”

Section: Introductionmentioning

confidence: 99%

An Ordinal Game Theory Approach to the Analysis and Selection of Partners in Public–Private Partnership Projects

Ouenniche

Boukouras

Rajabi

2015

J Optim Theory Appl

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Nowadays, public-private partnership projects have become a standard for delivering public services in both developed and developing countries. In this paper, we are concerned with the analysis of private sector proposals and the selection of the private sector partner to whom to award the contract. To the best of our knowledge, this problem has not been addressed within a game theory framework. To fill this gap, we model this decision problem as a static non-cooperative game of complete information and propose a new ordinal game theory algorithm for finding an optimal generalized Nash equilibrium. The proposed algorithm determines a single ranking of proposals or bidders that takes account of multiple performance criteria and reflects both the public sector and the private sector perspectives, and can handle any number of private sector players and any number of contractual terms. An illustrative scenario is provided to guide the reader through the workings of the proposed ordinal game theory algorithm. The proposed ordinal game theory-based analysis framework can be used by the private sector to analyse any set of potential proposals most likely to be submitted by bidders and to assist with the choice of bidding strategies, and by the public sector player to analyse any set of potential proposals most likely to be submitted under any set of contractual terms and to assist with the choice of a realistic set of contractual terms and their performance measures.

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“…Ho (2006) provided a theoretical model as the basis for G to renegotiate to be rescued from difficulties. Medda (2007) analyzed the bargaining process and the distribution of risk between the public and private sectors for transportation infrastructures. The Nanzih Wastewater Treatment Project that provides important experiences and lessons for both the public and private sectors is the first PPP application in Taiwan's wastewater treatment sector (Zheng, Tiong 2010).…”

Section: Reviewing the Documents Relevant To Taiwan High-speed Rail Pmentioning

confidence: 99%

The Analysis of Bot Strategies Based on Game Theory – Case Study on Taiwan's High Speed Railway Project

Chen

Lin

Wang

2012

Journal of Civil Engineering and Management

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Abstract. Uncertainty in a contract for some BOT (Build-Operate-Transfer) projects may allow an opportunistic developer to take advantage of information asymmetrical factors, long-term external changes, and agency dilemma to request renegotiation and to alter the contact after it has been awarded. Such requests often entrap the government in hold-up problems and result in improper payments to the developers and may even create general public dissatisfaction with a project. In this paper, the Game Theory model is used to analyze the Taiwan High Speed Railroad project to examine how developers implement different strategies at the various stages of a project to alter the contract's conditions in order to continually creating competitive advantage after they have been awarded the contract. This project developer is now facing serious financial difficulties. In this study, the financial information on the Taiwan High Speed Railroad operations was used as the foundation for conducting a simulation to calculate the project's value after this project began operation. The results will serve as reference to the best decision-making strategy for renegotiating costs in competition and cooperation so that a developer can select the optimum project offering the maximum reward. Also, the result will be offered to industries involved in market competition or act as an approach to establish future BOT policies on renegotiation.

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A game theory approach for the allocation of risks in transport public private partnerships

Cited by 258 publications

References 18 publications

A Decision Model of Risk Allocation for Urban Rail Transit Projects under Public-Private-Partnership Model: A Research Framework

A Decision Model of Risk Allocation for Urban Rail Transit Projects under Public-Private-Partnership Model: A Research Framework

An Ordinal Game Theory Approach to the Analysis and Selection of Partners in Public–Private Partnership Projects

The Analysis of Bot Strategies Based on Game Theory – Case Study on Taiwan's High Speed Railway Project

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