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Discrete Dynamics in Nature and Society
Volume 2014 (2014), Article ID 158765, 6 pages
http://dx.doi.org/10.1155/2014/158765
Research Article

Cost Allocation in PPP Projects: An Analysis Based on the Theory of “Contracts as Reference Points”

1School of Management and Engineering, Nanjing University, Nanjing 210000, China
2School of Economics and Management, Nanjing University of Technology, Nanjing 210009, China

Received 9 March 2014; Accepted 1 May 2014; Published 20 May 2014

Academic Editor: Xiaolin Xu

Copyright © 2014 Yichen Peng et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

In recent years, the demand for infrastructure has been largely driven by the economic development of many countries. PPP has proved to be an efficient way to draw private capital into public utility construction, where ownership allocation becomes one of the most important clauses to both the government and the private investor. In this paper, we establish mathematical models to analyze the equity allocation problem of PPP projects through a comparison of the models with and without the effects of the theory of “contracts as reference points.” We then derive some important conclusions from the optimal solution of the investment ratio.