Information Asymmetry on Heavy Civil Projects: Deficiency Identification by Contractors and Owners

Pesek, Anthony E.; Smithwick, Jake; Saseendran, Anusree; Sullivan, Kenneth

doi:10.1061/(asce)me.1943-5479.0000694

Cited by 20 publications

(19 citation statements)

References 41 publications

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“…Information asymmetry can enable the contractor to opportunistically take advantage of the client due to superiority of information. Pesek et al (2019) highlight information asymmetry as a practice that construction industry professionals are aware of and still not addressed signifying a knowing-doing gap. Adding to this, megaproject leadership such as the Managing Director (MD) or Chief Executive Officer (CEO) of the project, rarely comes from a construction background as most of these megaprojects are government-owned and often have a bureaucrat at its helm.…”

Section: Visualization For Risk Managementmentioning

confidence: 96%

4D visualization to bridge the knowing-doing gap in megaprojects: an Australian case study

Datta¹,

Sergeeva

Sankaran

2020

CEB

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The literature on megaprojects are oriented towards ‘knowing’ the problems and ‘knowing’ the solutions, and there is a dearth in literature aimed at explaining strategies adopted in ‘doing’ or implementing that knowledge. Particularly, the literature highlights communication as important as part of the ‘knowing,’ while there is a gap in ‘doing,’ as performance improvements are still not evident. This research aims to explore how this knowing-doing gap in the communication of risk information was addressed by using 4D visualization. This article discusses the vent facility of a megaproject in Australia as a case study to illustrate the innovation. The 4D model developed for the facility helped the project team to visualize the construction of a critical part of the project, discuss the construction methodology, identify the risks in the construction process and persuade the non-technical decision-makers of the project to take appropriate action. The risks identified through the visualization covered safety, program, and interface risks. This study offers insights into the role of visualization in bridging the knowing-doing gap in the construction industry in the context of a megaproject.

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Section: Visualization For Risk Managementmentioning

confidence: 96%

4D visualization to bridge the knowing-doing gap in megaprojects: an Australian case study

Datta¹,

Sergeeva

Sankaran

2020

CEB

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“…Meng and Gallagher [36] provided empirical evidence for the significant impact of incentive mechanisms on project performance. Besides, as stated by Xiang et al [18] and Pesek et al [37], information asymmetry is a widespread problem in construction projects. From the perspective of information economics, asymmetric information leads to opportunistic behavior, which is the primary cause of loss and risk in construction projects [39].…”

Section: Literature Reviewmentioning

confidence: 97%

Incentive schemes for centralized material planning and allocation with asymmetric information in construction supply chain

Wang

Chen

et al. 2024

IEEE Access

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In construction projects, a centralized management mode can effectively address the material management issues. Specifically, the Material Management Department (MMD) is responsible for material purchase, storage, and allocation based on the demand information reported by contractors. However, material demand are best observed by the contractors. They may manipulate the material takeoff (i.e. misrepresent the material demand) to increase the expected material allocation and avoid the project delay. Motivated by this situation, this paper focuses on the incentives to elicit truthful reporting from contractors. Cases of having prior information and no prior information about the material takeoff, as well as priority allocation and proportional allocation policies are considered. Under the case of having prior information, an incentive scheme is designed based on the Groves payment rule, while under the case of no prior information, two incentive schemes are designed based on the proper scoring rules. The comparison and numerical analysis show that the total three incentive schemes can induce the MMD to choose a systemoptimal inventory plan, as well as satisfy the participation constraints of contractors. Besides, the results also demonstrate that prior information is only the prerequisite for implementing the Groves incentive scheme and cannot improve the performance of the whole system in other aspects. INDEX TERMS Construction supply chain, material management, information asymmetry, incentive scheme. HUI LU received the B.Sc. degree in mechatronic engineering from Huazhong Agriculture University, and the Ph.D. degree in systems engineering from the

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“…However, in reality, the effectiveness of supervision is reduced because of the information gap between the government and contractors [ 21 , 22 ]. Zhang et al indicated that the information gap can hinder the information exchange and receiving supervision feedback between the government and contractors in the safety supervision process [ 44 ].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Nevertheless, the safety environment of construction sites is dynamic and complex and presents variations in time, cost and quality as well as interactions among different construction stakeholders [ 20 ]. Delays and deficiencies in communication occur between the government and contractors, resulting in an information gap that weakens supervision efficiency [ 21 , 22 ].…”

Section: Introductionmentioning

confidence: 99%

Developing a Dynamic Supervision Mechanism to Improve Construction Safety Investment Supervision Efficiency in China: Theoretical Simulation of Evolutionary Game Process

Gong

Gao

Zhou

et al. 2021

IJERPH

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The construction industry suffers from poor safety performance caused by the joint effect of insufficient safety investment by contractors and inefficient safety supervision by the government because of the information gap between the two sides. The present study aims to put forward a new pathway to improve safety investment supervision efficiency and analyze the decision-making interactions of stakeholders under this new pathway. For this purpose, this study establishes a safety investment information system to eliminate the information gap between the government and contractors for construction projects in China and further develops a dynamic safety investment supervision mechanism based on this. Evolutionary game theory is used to describe the decision-making interactions among stakeholders under the current static supervision mechanism and the dynamic supervision mechanism proposed in this research. Moreover, system dynamics is adopted to simulate the evolutionary game process and analyze the supervision effect and equilibrium state of different supervision mechanisms. The results reveal that the proposed safety investment information system could facilitate the transition of the supervision mode from static to dynamic; the evolutionarily stable strategy does not exist in the current static penalty scenario; and the dynamic supervision mechanism that correlates penalties with contractors’ unlawful behavior probability can restrain the fluctuation of the evolutionary game model effectively and the players’ strategy choices gradually stabilize in the equilibrium state. The results validate the effectiveness of the proposed dynamic supervision mechanism in improving supervision efficiency. This study not only contributes to the literature on safety supervision policy-making but also helps to improve supervision efficiency in practice.

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Information Asymmetry on Heavy Civil Projects: Deficiency Identification by Contractors and Owners

Cited by 20 publications

References 41 publications

4D visualization to bridge the knowing-doing gap in megaprojects: an Australian case study

4D visualization to bridge the knowing-doing gap in megaprojects: an Australian case study

Incentive schemes for centralized material planning and allocation with asymmetric information in construction supply chain

Developing a Dynamic Supervision Mechanism to Improve Construction Safety Investment Supervision Efficiency in China: Theoretical Simulation of Evolutionary Game Process

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