An alternative incomplete information bargaining model for identifying the reasonable concession period of a BOT project

• Incomplete information bargaining model for identifying the reasonable concession period of a BOT project
• Provide more guidelines for decision-making under the constraints of incomplete information
• Facilitate the decision making of local government in designing a BOT contract

Build-Operate-Transfer (BOT) scheme has been widely advocated with increasing demand of public infrastructure in recent years. As a critical component of the BOT contract, identifying concession period has been emphasized by both researchers and practitioners. However, existing studies usually assume the availability of complete information for decision-making, which is unreasonable in real-life projects. Therefore, this study develops a model to identify the reasonable concession period of a BOT project by utilizing incomplete information bargaining analysis. The model provides more guidelines for decision-making under the constraints of incomplete information. A hypothetical case from existing studies is used to demonstrate the procedure of the model. The model provides an alternative tool for the government to design the concession period before BOT tendering, which would reduce relevant negotiations after bidding. Limitations and relevant future studies have also been discussed.