Collusion prevention under different forms of performance-based subsidies during the operational period in PPP highway projects

The high-quality services of public–private partnership (PPP) highway projects have been receiving increasing attention from the government and private sector. Performance-based subsidies and regulations incentivize the private sector to improve service quality. However, third-party regulators may collude with the private sector to report false performance information for subsidies. This study investigates the conditions for incentivizing service quality and preventing collusion in long-term, multistage games by constructing tripartite evolutionary game models. It compares different forms of performance-based subsidies to optimize incentive effects. The results present thresholds for performance-based subsidies that effectively incentivize the private sector in the long run under collusion risk. Factors such as the additional cost of improving service quality and collusive share influence these thresholds. Based on numerical analyses of highway cases, results indicate the short-term incentive effect of collusion penalties for regulators and the private sector. Through demand-based subsidies, the government can incentivize the private sector to improve their services at lower costs. This study contributes to the relevant literature by focusing on opportunistic performance regulations and multiple subsidy forms. It also helps address collusion in a long-term, multistage process and provides insights for optimizing government subsidy decisions to enhance PPP performance and promote social welfare.