 Public–private partnerships, asymmetric information, and incomplete contractsEconomics Letters, 2025, vol. 256, issue C Abstract: We develop an incomplete-contracting model in which the government engages a private contractor to provide a public good. Over time, adaptations of the good to changing circumstances may become desirable. The contractor privately learns the costs of implementing these adaptations. We compare two organizational forms. In a public–private partnership, the government actively participates in project management and, by incurring information-gathering costs, may ascertain the contractor’s adaptation costs. Under traditional procurement, the government lacks direct involvement in project management, preventing it from ascertaining the adaptation costs. We show that the government’s potentially enhanced access to the contractor’s information in a public–private partnership can either support or undermine the case for such partnerships. Keywords: Public–private partnerships; Traditional procurement; Asymmetric information; Incomplete contracts; Information gathering (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004860 DOI: 10.1016/j.econlet.2025.112649 Access Statistics for this article Economics Letters is currently edited by Economics Letters Editorial Office More articles in Economics Letters from Elsevier |
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