Economics at your fingertips  

Public-Private Partnership Contractual Design: A Computational Model of the Moral Hazard with Lotteries

Rodrigo Nobre Fernandez (), Helton Saulo, André Carraro, Fabricio Tourrucôo and Ronald Hillbrecht
Additional contact information
Rodrigo Nobre Fernandez: Universidade Federal de Pelotas
Helton Saulo: Universidade Federal de Goiás
André Carraro: Universidade Federal de Pelotas
Fabricio Tourrucôo: Universidade Federal do Rio Grande do Sul
Ronald Hillbrecht: Universidade Federal do Rio Grande do Sul

Public Organization Review, 2018, vol. 18, issue 1, 39-51

Abstract: Abstract Public-Private Partnership (PPP) is a new model of public management which consists of the contractual relationship between public and private entities. In particular, PPPs enable risk share between public and private sectors making the asymmetric information problem in a contractual arrangement more evident. The aim of this paper was to study a moral hazard problem applied to PPP contracts. To achieve this objective, a PPP computational contractual model including the moral hazard with lotteries was developed to assess how contractual changes could affect the optimum behavior of arrangement members. Simulations indicate that projects with higher economic value should attract more qualified firms, which may be why the companies expend more effort. To deal with possible contractual contingencies and try to minimize the moral hazard problem, the government could draw up more flexible contracts in order to include possible necessary changes and punish unwanted or improper consortium behavior.

Keywords: Public-private partnership; Asymmetric information; Moral hazard; Linear program algorithm (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11115/PS2

Access Statistics for this article

Public Organization Review is currently edited by Ali Farazmand

More articles in Public Organization Review from Springer
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-05-15
Handle: RePEc:kap:porgrv:v:18:y:2018:i:1:d:10.1007_s11115-016-0359-x