APPLICATION OF PSYCHOLOGICAL HINT AND CROWD BEHAVIOR IN RISK MANAGEMENT OF PUBLIC-PRIVATE PARTNERSHIP PROJECT

Abstract

The public-private partnership (PPP) has been widely adopted in urban infrastructure projects. However, the PPP model may amplify the risk of these projects. Based on relevant theories, this paper applies psychological hint and crowd behavior into the risk management of PPP projects, aiming to effectively control the risk in urban PPP projects. On this basis, a PPP project risk management assessment model was established and the risks of actual PPP projects were classified. The results show that, to mitigate PPP project risk, the psychological hint should be applied with the focus on psychological guidance, i.e. stimulating the subconsciousness to cope with risk; the crowd behavior shares risk through optimal risk allocation and risk premia, but the project risk may be pushed up indirectly by the crowd behavior between the project parties; proper risk control measures should be taken in each phase of PPP projects. The research findings lay the theoretical basis for the application of psychological techniques in PPP project risk management.