Sharing Risk Through Concession Contracts

16 Pages Posted: 1 Jun 2010

See all articles by Pasquale L. Scandizzo

Pasquale L. Scandizzo

University of Rome

Marco Ventura

Istituto di Studi e Analisi Economica (ISAE)

Date Written: May 31, 2010

Abstract

In this paper we model concession contracts between a public and a private party, under dynamic uncertainty arising both from the volatility of the cash flow generated by the project and by the strategic behaviour of the two parties. Under these conditions we derive three notions of equilibrium price and apply the model to a case study for one of the most important concession contracts in Italy.

Keywords: Uncertainty Modelling, Real Option, Transportation, Risk Analysis, Concession

JEL Classification: D81, L91, L50

Suggested Citation

Scandizzo, Pasquale Lucio and Ventura, Marco, Sharing Risk Through Concession Contracts (May 31, 2010). CEIS Working Paper No. 166, Available at SSRN: https://ssrn.com/abstract=1618294 or http://dx.doi.org/10.2139/ssrn.1618294

Pasquale Lucio Scandizzo (Contact Author)

University of Rome ( email )

Via Columbia, 2
Rome, I-00133
Italy
+3906/72595929 (Phone)
+3906/2040219 (Fax)

Marco Ventura

Istituto di Studi e Analisi Economica (ISAE) ( email )

Piazza dell' Indipendenza 4
I-00185
Italy

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