Public-private partnerships versus traditional procurement: An experimental investigation
نویسندگان
چکیده
A government agency wants an infrastructure-based public service to be provided. Our experimental study compares two di¤erent 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 nd 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: Public-private partnerships; procurement; incomplete contracts; experiment JEL Classi cation: D86; L33; H11 Corresponding author. Department of Economics, University of Cologne, AlbertusMagnus-Platz, 50923 Köln, Germany. E-mail addresses: [email protected] (E.I. Hoppe), [email protected] (D.J. Kusterer), [email protected] (P.W. Schmitz).
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