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Evolutionary game of investors’ opportunistic behaviour during the operational period in PPP projects

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  • Jicai Liu
  • Ruolan Gao
  • Charles Yuen Jen Cheah
  • Jian Luo

Abstract

In public–private partnership (PPP) projects, during the operational period, private investors are prone to act opportunistically in pursuit of their own gain. Based on the perspectives of government’s administrative supervisory functions, this paper analyses the issue of strategic choice for opportunistic behaviour by the government and private investors during the operational period of projects using evolutionary game theory. The results show that there is not a single set of evolutionarily stable strategies (ESS) between the government and the investors. The end results of the evolutionary game are related to the initial states of the system. Conditions that would dissuade investors from adopting an opportunistic behaviour, and settings that would encourage government to supervise closely, are explored. Punishments set by the government, which would then lead to different ultimate choices made by these two parties, are also discussed. Finally, the paper proposes a few policy recommendations for government supervision on the basis of parametric analysis. The findings also serve as a reference for the decision-making process of the government and the investors.

Suggested Citation

  • Jicai Liu & Ruolan Gao & Charles Yuen Jen Cheah & Jian Luo, 2017. "Evolutionary game of investors’ opportunistic behaviour during the operational period in PPP projects," Construction Management and Economics, Taylor & Francis Journals, vol. 35(3), pages 137-153, March.
    • Handle: RePEc:taf:conmgt:v:35:y:2017:i:3:p:137-153
    DOI: 10.1080/01446193.2016.1237033
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    Cited by:

    1. Ceric Anita & Ivic Ivona, 2021. "Network analysis of interconnections between theoretical concepts associated with principal–agent theory concerning construction projects," Organization, Technology and Management in Construction, Sciendo, vol. 13(2), pages 2450-2464, January.
    2. Zhang, Jiayu & Yang, Xiaodong & Wang, Hao, 2021. "Age-friendly regeneration of urban settlements in China: Game and incentives of stakeholders in decision-making," Land Use Policy, Elsevier, vol. 111(C).
    3. Zhao, Jinqiu & Luo, Chao, 2019. "The effect of preferential teaching and memory on cooperation clusters in interdependent networks," Applied Mathematics and Computation, Elsevier, vol. 363(C), pages 1-1.

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