An evolutionary game analysis of user-pay public–private partnership projects
Engineering, Construction and Architectural Management
ISSN: 0969-9988
Article publication date: 28 October 2020
Issue publication date: 16 July 2021
Abstract
Purpose
With the growing demand for infrastructure and public services in recent years, PPP-UP have attracted a great deal of attention. However, while the user focuses on the payment for use and the private sector is concerned with its return on investment, the public sector pays more attention to the efficient utilization of public funds. In order to analyze the willingness of each stakeholder to join PPP-UP, an evolutionary game model involving the three parties is constructed.
Design/methodology/approach
An evolutionary game model is established that considers the users and the public and private sectors in user-pay public-private-partnership projects (PPP-UP). Eight scenarios of equilibriums and the game's evolutionary stable strategies are analyzed, and the corresponding stability conditions are then obtained. A situation where all three players are willing to cooperate in theory is also examined. The key influencing parameters that affect cooperation behaviors are further discussed.
Findings
First, the results illustrate that by properly adjusting the influencing factors, the cooperation status among the three parties can be changed along with certain evolutionary trends. Second, it is hard to modify unsatisfactory evolutionary stability by small changes in both the price compensation of and the construction and operation compensation. Third, it is necessary to involve the users in the decision-making process in PPP-UP and take their demands regarding benefits and payments into account.
Originality/value
In this paper, we focus on PPP-UP to research interactions among the public and private sectors and the users. Based on the analysis of the evolutionary game, to facilitate the successful implementation and development of a project, several conditions are needed to ensure tripartite cooperation. Several recommendations are then proposed for decision-makers in PPP-UP.
Keywords
Acknowledgements
This research is supported by the National Natural Science Foundation of China with Grant Nos. 71802103, 71734001, 71772082, and 71672018, the Fundamental Research Funds for the Central Universities of China with Grant No. DUT20RW601, Liaoning Province Philosophy and Social Science Planning Fund Office with Grant No. L15BGL005, Foundation of Liaoning Educational Committee with Grant No. 2019LNQN13, and University of Science and Technology Liaoning with Grant No. 2018RC09.
Citation
Song, D., Song, J., Yuan, H. and Fan, Y. (2021), "An evolutionary game analysis of user-pay public–private partnership projects", Engineering, Construction and Architectural Management, Vol. 28 No. 7, pp. 2042-2062. https://doi.org/10.1108/ECAM-06-2020-0460
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited