On the Moral Risk of the Franchised Enterprise in the Operation of Highway The Traffic Administrative Department on Behalf of Public Interest

Assuming that the traffic administrative department is on behalf of public interest, a model of game theory was established to illustrate the moral risk of the franchised enterprise in the operation of highway. This paper thought that to bring the franchised enterprise under regulation and to improve the supply efficiency of highway, we must make efforts from the following three aspects. First, increase punishment appropriately. Second, increase awards from the government. Third, support and help the franchised enterprise to reduce its daily operating cost.