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Public-private partnerships versus traditional procurement: An experimental investigation

Eva Hoppe, David Kusterer and Patrick Schmitz

No 02-02, Cologne Graduate School Working Paper Series from Cologne Graduate School in Management, Economics and Social Sciences

Abstract: A government agency wants an infrastructure-based public service to be provided. Our experimental study compares two different modes of provision. In a public-private partnership, the two tasks of building the infrastructure and operating it are delegated to one private contractor (a consortium), while under traditional procurement, these tasks are delegated to separate contractors. We find support for the theoretical prediction that, compared to traditional procurement, a public-private partnership provides stronger incentives to make cost-reducing investments (which may increase or decrease service quality). In two additional treatments, we study governance structures which explicitly take subcontracting within private consortia into account.

Keywords: experiment; incomplete contracts; procurement; public-private partnerships (search for similar items in EconPapers)
JEL-codes: D86 H11 L33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-exp, nep-pbe and nep-ppm
Date: 2011-01
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Related works:
Journal Article: Public–private partnerships versus traditional procurement: An experimental investigation (2013) Downloads
Working Paper: Public-private partnerships versus traditional procurement: An experimental investigation (2010) Downloads
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