THE SIGNALING PARADOX – A behavioral framing experiment on the effect of 'publicness' on strategic behavior in PPPs

Public-private partnerships (PPPs) have become widespread in the delivery of public services. This paper explores cognitive and behavioral mechanisms of partnering across sectors at the micro-level of interaction between... [ view full abstract ]

Public-private partnerships (PPPs) have become widespread in the delivery of public services. This paper explores cognitive and behavioral mechanisms of partnering across sectors at the micro-level of interaction between public and private partners. We argue that role framings of partners as public or private can have adverse signaling effects on individuals’ intention to uphold effective partnerships over time, and that this intent is moderated by sector-specific attitudes. Using a novel and dynamic multi-stage behavioral experiment based on the classic centipede game (N=482, Obs.=4,338), we show that sector affiliation functions as a strong signal for partners’ strategic behavior in PPPs and that sector-specific associations asymmetrically moderate respondents’ will to collaborate. These findings contribute to micro-foundations of strategic behavior in PPPs, calling into question assumptions about coordination efficiency in cross-sectoral partnerships. We draw conclusions on the governance of risk in PPPs and derive an agenda for future research.

Keywords: PPP, signaling, strategic risk behavior, collaboration, behavioral public administration.