Private Capital Investment Behaviors in Public Transport Based on Prospect Theory

Yunqiang Xue (), Jing An, Haibo Chen, Qingxia Huang, Yuhan Bi and Junying Li
Additional contact information
Yunqiang Xue: East China Jiaotong University, School of Transportation Engineering
Jing An: East China Jiaotong University, School of Transportation Engineering
Haibo Chen: the University of Leeds, Institute for Transport Studies
Qingxia Huang: Nanchang Urban Planning and Design Institute Group CO., LTD
Yuhan Bi: East China Jiaotong University, School of Transportation Engineering
Junying Li: East China Jiaotong University, School of Transportation Engineering

A chapter in Proceedings of the 2025 4th International Conference on Public Service, Economic Management and Sustainable Development (PESD 2025), 2025, pp 569-578 from Springer

Abstract: Abstract Considering the bounded rationality of investors in reality, this study analyzed the private investment decision behaviors in public transport based on prospect theory. The study took the minimum expected gain of investors as the reference point, considered the total return and investment of the project, the investment ratio and return ratio of investors, the intervention cost and decision weight, then constructed an investor prospect model. The numerical example shows that different reference points can affect the prospect values, leading to changes in the ranking of decision options, indicating that reference points play an important role in investors’ investment decisions. If the probability of obtaining high returns cannot be guaranteed, investors tend to choose low return and low-risk strategies, indicating that investors usually have a loss aversion mentality when making decisions. In order to attract private investment in public transport and improve the success rate of private investment in public transport, managers should develop flexible incentive mechanisms to provide investors with corresponding incentives to ensure the probability of obtaining returns. Compared with the expected utility theory, the prospect theory can better reflect the subjective differences in decision-making and is more consistent with real decisions.

Keywords: private capital investment; public transport; prospect theory; Public-Private Partnership (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-916-2_61

Ordering information: This item can be ordered from
http://www.springer.com/9789464639162

DOI: 10.2991/978-94-6463-916-2_61

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().