Evolutionary Game Analysis for the Behaviors of Risk Allocation Participants in Public–Private Partnerships
Publication: ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering
Volume 9, Issue 2
Abstract
A fair allocation of risk is essential for successful projects involving public–private partnerships (PPPs). The participants to the risk allocation determine whether to take risks and how much of the share of the risks to assume according to their preference for and ability to manage risk. Owing to the different preferences of the public sector and private sector in the context of risk allocation, the perspective of local governance demands that the participants of risk allocation express their cognitive demands and interests through negotiation and dialog to arrive at a consensus on the choice of the scheme to use for risk allocation. To examine how risk-taking behaviors evolve in PPPs, this study develops an evolutionary game model in which the private and public sectors initiate the negotiation. This model is used to analyze the evolutionary stability of each player’s strategy, discuss the influence of various factors on the choices of strategy of the two parties, and to examine the stability of the point of equilibrium of the game system for the participants of risk allocation. The results provide decision-making support in negotiating appropriate concessions in PPP projects to reduce the incidences of renegotiation and incentives for either party to seek to renegotiate.
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Data Availability Statement
All of the data, models, and code that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
This work was supported by the National Social Science Foundation of China (Grant No. 19BJY226).
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ASCE-ASME Journal of Risk and Uncertainty in Engineering Systems, Part A: Civil Engineering
Volume 9 • Issue 2 • June 2023
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© 2023 American Society of Civil Engineers.
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Received: Sep 12, 2022
Accepted: Dec 6, 2022
Published online: Feb 8, 2023
Published in print: Jun 1, 2023
Discussion open until: Jul 8, 2023
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