Building a conceptual theory of anti-competition laws in public-private partnerships

Abstract

The growing economic presence of public-private partnerships in the market has led to an increased monopolization and subsequent reduction in competition in sectors such as infrastructure, utilities, and health services. Much of this can be contributed to the principal-agent problems that arise between the government and its constituents. Previous research has demonstrated the strain that anti-competitive practices place on the market, but little research on competition has been directed towards understanding how the active participation of public sector actors affect competition when in league with their private sector counterparts. Using data from public-private infrastructure projects in the United States, a monte carlo test on public-private infrastructure expenditures, the data of which is then set into a cooperative game-theory to determine changes in the public actor’s preferential outcome in the presence of increased risk. This quantitative analysis is then placed within a conceptual framework which demonstrates that many of the principal-agent problems can be overcome by the inclusion of anti-completion regulations.