Universität zu Köln

Schmitz, Patrick W. ORCID: 0000-0003-3461-5102 (2025). Public–private partnerships, asymmetric information, and incomplete contracts. Economics Letters, 256. pp. 1-5. Elsevier. ISSN 0165-1765

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Abstract

[Artikel-Nr.: 112649] 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.

Item Type:	Article
Creators:	Creators Email ORCID ORCID Put Code Schmitz, Patrick W. UNSPECIFIED https://orcid.org/0000-0003-3461-5102 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-810904
Identification Number:	10.1016/j.econlet.2025.112649
Journal or Publication Title:	Economics Letters
Volume:	256
Page Range:	pp. 1-5
Number of Pages:	5
Date:	October 2025
Publisher:	Elsevier
ISSN:	0165-1765
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Weitere Institute, Arbeits- und Forschungsgruppen > Staatswissenschaftliches Seminar
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language Public–private partnerships ; Traditional procurement ; Asymmetric information Incomplete contracts ; Information gathering English
['eprint_fieldname_oa_funders' not defined]:	Publikationsfonds UzK
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/81090