*Article* **How Private Enterprises' Participation Behaviors Evolve with Incentive Modes in PPPs: An Evolutionary Game View**

**Yunhua Zhang 1, Hongyang Yi 1, Hongtao Xie 2, Junwei Zheng <sup>1</sup> and Yan Wang 3,\***


**Abstract:** The high risk of financing, building, and operating Public–private partnerships (PPPs) often results from the event that participants can barely obtain expected economic returns, thus inhibiting private enterprises' willingness to participate in PPPs. To increase private enterprises' desire to participate, this study constructed an evolutionary game model of private enterprises' participation in PPPs, focusing on the perspective of the mode of incentive. This model revealed the evolutionary law of private enterprises' participation behavior under different modes of incentive. The results indicate that: First, there is a positive correlation between the intensity of government incentive, the investment return rate, and the probability of private enterprises choosing to participate in PPPs. Specifically, the impact of the investment return rate is more sensitive than the other factors. Second, the cost rate of financing and the risk cost of project uncertainty are negatively correlated with the probability of private enterprises choosing to participate in PPPs, and the impact of the project risk cost is more sensitive than the other factors in this case.

**Keywords:** public–private partnership; private enterprises; participation behavior; evolutionary game; project governance
