Subsidizing and pricing private toll roads with noncontractible service quality: A relational contract approach

Feng, Zhuo; Zhang, Shui-Bo; Gao, Ying; Zhang, Shuaijun

doi:10.1016/j.trb.2016.04.017

Cited by 38 publications

(25 citation statements)

References 33 publications

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“…an external or informal relationship among stakeholders to monitor the performance of each other's responsibilities) (Hossain, 2009). The four relationships above have been assigned with a same weight in this study, and this complies with previous studies such as Wang and Tiong (2000), Chowdhury et al (2011) and Feng et al (2016). The indices reported by stakeholder exchange network act as the basis to quantify stakeholder influence.…”

Section: Methodsmentioning

confidence: 62%

“…In addition, the influence level of public authority is higher than that of private consortium. This is attributed to the authority, responsibility and expertise of the government (Wang and Tiong, 2000; Chowdhury et al , 2011; Feng et al , 2016).…”

Section: Discussionmentioning

confidence: 99%

“…The influence level of a stakeholder, essentially, is determined by its: (1) connections with other stakeholders, (2) resource attributes and (3) network formed by the contacts (Rowley, 1997; Tan et al , 2019). Due to the complexity of stakeholder structure in PPP projects, for example, for a social infrastructure project, public authority attempts to maximize social welfare, while private entities are profit-oriented and would pursue profit maximization (Feng et al , 2016). Thus, balancing different stakeholders' interests and influences within the “partnership” is a challenge.…”

Section: Literature Reviewmentioning

confidence: 99%

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Managing public–private partnerships: a transmission pattern of underlying dynamics determining project performance

Wang

Liu

et al. 2020

ECAM

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PurposeThe performance of public–private partnerships (PPPs) can be determined by a variety of factors, i.e. influencing factors (IFs). This study is undertaken for a purpose of identifying how such factors determine the project's performance (i.e. factor transmission patterns), particularly from the key stakeholders' perspectives.Design/methodology/approachA hybrid approach, which comprises a Social Network Analysis, ISM (i.e. Interpretive Structural Modeling) and an improved DEMATEL (i.e. Decision-Making Trail and Evaluation Laboratory), was developed to analyze the causal relationships between the identified IFs as well as the transmission patterns of their impacts on PPPs. Data were collected from interviews and questionnaire surveys.FindingsThe transmission patterns of the identified IFs cascade from project environment and features and stakeholders' relationship to the project company capabilities and project process. It is identified that the public authority has a higher level than that of the private entity in PPPs.Research limitations/implicationsIt lacks longitudinal studies to investigate the dynamics of PPP stakeholder relationships and social networks. Future research needs to explore the transmission patterns of sub-factors affecting PPP performance and extend the applicability of the developed hybrid approach.Practical implicationsThis research provides practitioners with a robust tool that is useful for and insights into enhancing the management of lifecycle performance. It ensures the public authorities and private entities embarking on PPPs will make an informed decision about the monitoring of the life cycle performance.Originality/valueThis study contributes to knowledge of managerial mechanisms that can be adopted to manage factors determining the performance of PPPs. It enables an understanding of stakeholders' roles in driving the life cycle performance of PPPs.

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Section: Methodsmentioning

confidence: 62%

Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Managing public–private partnerships: a transmission pattern of underlying dynamics determining project performance

Wang

Liu

et al. 2020

ECAM

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“…There are also some studies that have applied PPP to various contexts, especially to the highway projects. For example, Feng et al (2016) investigate the government's optimal incentive contract design for PPP toll roads in the presence of noncontractible road quality. Tan and Yang (2012) examine a flexible contract for PPP toll roads to counter traffic demand uncertainty.…”

Section: Literature Reviewmentioning

confidence: 99%

Mitigating poverty through solar panels adoption in developing economies

Feng

2021

Decision Sciences

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Motivated by a widely practiced strategy to combine the growth of the solar energy sector with poverty mitigation, we propose stylized models of households selling extra solar energy back to the grid, which generates a steady stream of income to overcome adoption barriers for solar panels, that is, high adoption cost and generation variability. By considering households' strategic consumption shifting behavior in response to varying intertemporal market electricity prices, we have presented the equilibrium adoption number and households' equilibrium profit. We have also demonstrated the government's optimal subsidy to reach a socially optimal adoption level. Furthermore, we investigate the popular Public Private Partnership (PPP) model in developing countries to promote the investment of solar panels. Under the PPP program, the private firms share both upfront cost and electricity revenue with households, while the government may provide subsidy to further encourage adoption. Despite the popularity of the PPP scheme, our model documents an unexpected negative implication by inducing a lower overall adoption level than the traditional scheme: As the PPP scheme relieves budgetary burden of households in adopting solar panels (infrastructure cost), anticipating the long-term revenue loss, they are less likely to participate in the first place. However, combined with the government intervention via adoption subsidy, the PPP scheme can lead to a win-win solution for all.

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“…Consequently, a need persists in formulating the subsidy agreement under incomplete information so that the government can determine an appropriate subsidy plan. However, as Feng et al [40] mentioned, a critical assumption exists that the negotiators are well informed of one another to design a guarantee agreement accordingly in the previous studies. Few studies have handled the problem of incomplete information while determining the amount of subsidy.…”

Section: Literature Reviewmentioning

confidence: 99%

Alternative Model to Determine the Optimal Government Subsidies in Construction Stage of PPP Rail Transit Projects under Dynamic Uncertainties

Zhang

Zhou

2020

Mathematical Problems in Engineering

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Urban rail transit is a quasioperational project and its net cash inflow can hardly cover the investment expenditure. It is essential to determine an acceptable amount of government subsidy to ensure the financial viability of the PPP projects, so as to encourage the entry of the private partner. The partners involved in PPPs have common interests but conflict regarding the value of government subsidy. Considering the uncertainty characteristic by PPPs and information incompleteness in the decision-making process, this study presents a methodology to calculate the equitable subsidy ratio favored by both participants. This study divides the decision process into two steps. First, this study constructs a financial model and introduces an acceptable range of subsidy ratio by using the Monte Carlo simulation method. Second, this study uses the bargaining game theory to determine a particular subsidy ratio under incomplete information. To verify the applicability of the presented model, the researchers invoke an illustrative example for model validation. This research provides a referential and operational method for the government and private sectors to make government subsidy decisions for quasioperational projects.

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Subsidizing and pricing private toll roads with noncontractible service quality: A relational contract approach

Cited by 38 publications

References 33 publications

Managing public–private partnerships: a transmission pattern of underlying dynamics determining project performance

Managing public–private partnerships: a transmission pattern of underlying dynamics determining project performance

Mitigating poverty through solar panels adoption in developing economies

Alternative Model to Determine the Optimal Government Subsidies in Construction Stage of PPP Rail Transit Projects under Dynamic Uncertainties

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