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Martimort, David
and Straub, Stéphane
(2012)
How to Design Infrastructure Contracts in a Warming World? A Critical Appraisal of Public-Private Partnerships.
TSE Working Paper, n. 12-315
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Abstract
We analyze how uncertainty regarding future climate conditions affects the design of concession contracts, organizational forms and technological choices in a principal-agent context with dynamic moral hazard, limited liability and irreversibility constraints. The prospect of future, uncertain productivity shocks on the returns on the firm’s effort creates an option value of delaying efforts which exacerbates agency costs. Contracts and organizational forms are drafted to control this cost of delegated flexibility. Our analysis is relevant for infrastructure sectors that are sensitive to changing weather conditions and sheds a pessimistic light on the relevance of Public-Private Partnerships in this context.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | 11 May 2012 |
| JEL Classification: | D82 - Asymmetric and Private Information L32 - Public Enterprises Q54 - Climate; Natural Disasters |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:26 |
| Last Modified: | 18 Apr 2024 11:49 |
| OAI Identifier: | oai:tse-fr.eu:25892 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15312 |
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