Achieving Optimal Risk Allocation for Electric Vehicle Charging Infrastructure PPP Projects: A Bargaining Game Model with Consideration of Bilateral Reciprocal Preferences

With growing environmental and energy concerns, developing the electric vehicle (EV) industry has become an important global strategy. Integral to this strategy is the construction and operation of the EV charging infrastructure, which is crucial for livable city development and residents’ convenience. Effective EV charging infrastructure deployment requires collaboration between governments and private sectors to allocate risks properly. However, existing research on risk allocation often neglect the impact of reciprocal preference, which is a critical element in public–private partnership (PPP) cooperation, especially in EV charging infrastructure projects. This study proposes a novel approach to achieve optimal risk allocation between the local government and the private sector for EV charging infrastructure PPP projects incorporating bilateral reciprocal preferences. A negotiation framework considering reciprocal preferences is introduced, followed by constructing a bargaining game model. After deriving the optimal risk allocation ratios, impacts of discount factors and reciprocity coefficients are analyzed. Model validation is conducted using a public EV charging infrastructure project in Tianjin, China. Our findings reveal that discount factors and reciprocity coefficients have significant influence on risk allocation ratios. Furthermore, reciprocal preference does not always have a positive effect on risk allocation. Balanced and reasonable reciprocal preference can contribute to risk allocation and cooperation while the party with excessive reciprocal preference may impede the allocation because it tries to gain high utility by shifting risks. This study contributes theoretically by elucidating the role of reciprocal preference in fostering PPP cooperation and properly allocating risks in the EV charging infrastructure projects. Additionally, it offers practical insights by providing a tool for efficient risk allocation, emphasizing the consideration of reciprocal preferences and participants’ capabilities, and contributing to promote the successful implementation and higher social welfare in creating livable societies.