Game analysis of social capital violations and government regulation in public–private partnership risk sharing

Li, Yan; Wang, Xinyu

doi:10.1002/sys.21657

Cited by 4 publications

(1 citation statement)

References 62 publications

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“…They conducted interviews with practitioners in the Zambian construction industry for finding ways to optimize risksharing practices. Li (Li and Wang, 2023) studied the risk sharing problem in the public-private partnership model and constructed a game model of PPP risk sharing dynamic government regulation. Shi et al (2021) argued against the effect of the Principal-Agent Theory in designing risk-sharing rules for construction projects involving risk-neutral contractors.…”

Section: Figurementioning

confidence: 99%

Risk sharing in quasi-public-welfare water conservancy (PPP) public-private participation projects: an integrated application of Shapley value and utility theory

Liu,

Tan

2023

Front. Earth Sci.

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Introduction: Quasi-public water conservancy PPP (Public-private participation) projects are closely related to people’s livelihoods and involve multiple participating stakeholders. Previous research on risk sharing in such projects has primarily focused on qualitative analysis of risk factors. Due to self-interest considerations, the collaborating parties tend to deflect and transfer risks to each other as much as possible in the risk sharing process. Additionally, some quantitative analysis methods have been predominantly based on a unilateral perspective.Methods: Therefore, the present study proposed a new model, which is based on the Shapley Value and the Utility Theory, encompassing a comprehensive analysis of multiple factors such as the proportion of capital contribution, bargaining position, risk management capabilities, and risk-taking willingness of heterogeneous subjects. Firstly, the relationship between the risk losses of different stakeholders and their corresponding value scales and utility attributes is comprehensively analysed, and the transformation characteristics and links of their risk preferences on spatial and temporal scales are summarised. Secondly, The utility values of heterogeneous subjects are employed as quantitative indicators to evaluate utility, leading to the construction of a comprehensive utility objective function for these subjects. Finally, The Shapley Value is then applied to modify the risk-sharing ratio based on the Utility Theory.Results: The research results show that the risk sharing ratio obtained by single use of shapley value theory or utility theory will be biased toward one side, while the result calculated by using the combination of the two methods is 57.35% for the government to share the risk ratio, and 42.65% for the social capital side, which is a more balanced result.Discussion: The proposed model enriches the risk management method and theory of quasi public welfare water conservancy PPP projects.

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Section: Figurementioning

confidence: 99%

Risk sharing in quasi-public-welfare water conservancy (PPP) public-private participation projects: an integrated application of Shapley value and utility theory

Liu,

Tan

2023

Front. Earth Sci.

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Artificial Intelligence in Public Security Administrative Law Enforcement and its Risk Regulation

Zhao

2023

2023 3rd International Conference on Smart Generation Computing, Communication and Networking (SMART GENCON)

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Attracting Private Investment in Public-Private-Partnership: Tax Reduction or Risk Sharing

Wang,

Geng,

Moehler

et al. 2024

Journal of Civil Engineering and Management

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With the financial burden of government increasing, the Public-Private-Partnership (PPP) model has become an alternative method to develop public infrastructure. To efficiently promote the private sector to participate in PPP, making a proper incentive policy is critical for the government. This paper examined the effects of two governmental support policies, i.e., tax reduction and risk-sharing, on the investment decision of the private sector, and further compared the relative efficacy of these two policies. The results manifest that: first, both tax reduction and risk-sharing policies motivate private sector to invest earlier; second, although the capital structure decision of the private sector is free from the influence of the risk-sharing policy, the optimal debt level under tax reduction policy shows a U-shape relationship with the incentive ratio; third, when completion risk is large, there exists efficiency loss for total benefits of the project under the risk-sharing incentive policy. Besides, the efficacy of two incentive policies varies depending on the scenario. Firstly, given the same incentive ratio, the risk-sharing policy proves to be more effective than the tax reduction policy. Secondly, when considering the same level of incentive loss for government, tax reduction policy outperforms than risk-sharing policy in terms of efficacy. Thirdly, the efficacy of these policies also depends on the completion risk level: under small completion risk, risk-sharing policy is more effective, whereas under large completion risk, the tax reduction policy takes precedence. Based on these findings, some managerial insights that could assist government in formulating more effective incentive policies are proposed.

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Game analysis of social capital violations and government regulation in public–private partnership risk sharing

Cited by 4 publications

References 62 publications

Risk sharing in quasi-public-welfare water conservancy (PPP) public-private participation projects: an integrated application of Shapley value and utility theory

Risk sharing in quasi-public-welfare water conservancy (PPP) public-private participation projects: an integrated application of Shapley value and utility theory

Artificial Intelligence in Public Security Administrative Law Enforcement and its Risk Regulation

Attracting Private Investment in Public-Private-Partnership: Tax Reduction or Risk Sharing

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