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Auriol, Emmanuelle
and Picard, Pierre M.
(2011)
A Theory of BOT Concession Contracts.
TSE Working Paper, n. 11-228, Toulouse
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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-o¤ 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: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | 25 March 2011 |
| Place of Publication: | Toulouse |
| 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) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 18 Jan 2012 06:03 |
| Last Modified: | 02 Apr 2021 15:36 |
| OAI Identifier: | oai:tse-fr.eu:24307 |
| URI: | https://publications.ut-capitole.fr/id/eprint/3506 |
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