Public–private partnerships, asymmetric information, and incomplete contracts

C-Tier
Journal: Economics Letters
Year: 2025
Volume: 256
Issue: C

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We develop an incomplete-contracting model in which the government engages a private contractor to provide a public good. Over time, adaptations of the good to changing circumstances may become desirable. The contractor privately learns the costs of implementing these adaptations. We compare two organizational forms. In a public–private partnership, the government actively participates in project management and, by incurring information-gathering costs, may ascertain the contractor’s adaptation costs. Under traditional procurement, the government lacks direct involvement in project management, preventing it from ascertaining the adaptation costs. We show that the government’s potentially enhanced access to the contractor’s information in a public–private partnership can either support or undermine the case for such partnerships.

Technical Details

RePEc Handle
repec:eee:ecolet:v:256:y:2025:i:c:s0165176525004860
Journal Field
General
Author Count
1
Added to Database
2026-01-29