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Auriol, Emmanuelle
and Picard, Pierre M.
(2013)
A Theory of BOT Concession Contracts.
Journal of Economic Behavior and Organization, 89.
pp. 187-209.
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Abstract
In this paper, we discuss the choice for build-operate-and-transfer (BOT) concessions when governments and firm managers do not share the same information regarding the operation characteristics of a facility. We show that larger shadow costs of public funds and larger information asymmetries entice governments to choose BOT concessions. This result stems from a trade-off between the government’s shadow costs of financing the construction and the operation of the facility and the excessive usage price that the consumer may face during the concession period. The incentives to choose BOT concessions increase as a function of ex-ante informational asymmetries between governments and potential BOT concession holders and with the possibility of transferring the concession cost characteristics to public firms at the termination of the concession.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | 2013 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Public-private-partnership, privatization, adverse selection, regulation, natural monopoly, infrastructure, facilities |
| JEL Classification: | D83 - Search; Learning; Information and Knowledge; Communication; Belief L33 - Comparison of Public and Private Enterprises; Privatization; Contracting Out L43 - Legal Monopolies and Regulation or Deregulation L51 - Economics of Regulation |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:21 |
| Last Modified: | 02 Apr 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:25116 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15157 |
Available Versions of this Item
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A Theory of BOT Concession Contracts. (deposited 18 Jan 2012 06:03)
- A Theory of BOT Concession Contracts. (deposited 09 Jul 2014 17:21) [Currently Displayed]
