Danau, Daniel; Vinella, Annalisa - Centre de Recherche en Économie et Management (CREM) - 2015
A government delegates a build-operate-transfer project to a private firm. At the contracting stage, the operating cost is unknown. The firm can increase the likelihood of facing a low cost (the good state), rather than a high cost (the bad state), by exerting costly effort when building the...