Do Exit Options Increase the Value-For-Money of Public-Private Partnerships?

Arbeitspapier

We study the effects of granting an exit option that enables the private party to early terminate a PPP project if it turns out to be financially loss-making. In a continuous-time setting with hidden information about operating profits, we show that an exit option, acting as a risk-sharing device, can soften agency problems and, in so doing, accelerate investment and increase the government's expected payoff, even while taking into account the costs that the public sector will have to meet in the future to take direct responsibility on service provision.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 003.2020

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Asymmetric and Private Information; Mechanism Design ; Economics of Contract: Theory ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
• Thema: Public Infrastructure Services ; Public-Private Partnerships ; Adverse Selection ; Real Options ; Early Termination Fees

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Buso, Marco ; Dosi, Cesare ; Moretto, Michele
• Ereignis: Veröffentlichung
• (wer): Fondazione Eni Enrico Mattei (FEEM)
• (wo): Milano
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/223630
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ