Adequate risk allocation demands consideration of the participants’ risk tolerance. Without prompt risk reallocation, public–private partnership (PPP) transportation projects may fail when project risks exceed the participants’ risk tolerance. This paper establishes a dynamic risk allocation mechanism for PPP transportation projects from the perspective of participants’ risk tolerance, to ensure smooth operation. This paper employs bargaining and evolutionary game theory to construct a risk allocation mechanism. It includes risk allocation and reallocation, and risk allocation schemes and strategies for the two stages are obtained by solving the game model. The research findings indicate three risk overspending scenarios following the risk allocation. When one party exceeds the risk tolerance, the evolutionary stability strategy tends to assist the overspending party in bearing the risk if the other party has not overspent. When both parties exceed their risk tolerance, the evolutionary stability strategy tends to share the risk. The willingness of participants to engage in risk reallocation can be improved by boosting the participants’ risk preference. Under the same conditions, the risk preference of private investors is more sensitive to the willingness to participate in risk reallocation than that of the government. The proposed dynamic risk allocation mechanism comprehensively links risk allocation and reallocation, thereby resolving the issue of participants exceeding their risk tolerance. It enhances risk allocation efficiency and risk management level, thus ensuring the stable implementation of transportation PPP projects.
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