Stability Analysis of Cooperation between Owners and Contractors in the Construction Market

Abstract

In a price-driven, low-bid system a cooperative contract may be helpful in reducing problems that arise from competitive bidding. In this article, the authors examine the stability of cooperation between owners and contractors through a repeated game model with provident partners. Firstly, the profits of defecting and cooperating partners are compared to determine whether there is motivation to defect. This comparison is achieved by using a dynamic model to calculate the loss and recovery of trust. Secondly, the authors examine the relationship between stability and its influential factors under the condition of partner changing. The authors' examination reveals that stability of cooperation correlates negatively with both the recovery velocity of trust and the probability of undiscovered defection, but has a positive correlation with the number of consecutive defections. Furthermore, the possibility of extra profit is the key motivation for unilateral defections under the condition of fixed partners. The authors conclude by proposing methods for maintaining the stability of cooperation.

Project-Based Market Competition and Policy Implications for Sustainable Developments in Building and Construction Sectors

“…In accordance with the aforementioned evidences, at least six adverse feedback loops hidden within the PBS have been identified [35]. Subsequent studies and empirical analyses support the adverse impacts on the building and construction industries in many countries, including the U.S. and China [36][37][38][39][40][41]. The structural feedback loops of project-based competition (as shown in Figure 1) are summarized as the following three groups:…”

Ecological effect life cycle assessment of house buildings based on emergy footprint model

“…For pouring concrete per cubic metre, 1700–2400 L of water will be needed. The mean is taken in the calculation, namely, 2050 L. In addition, the imbalance coefficient is taken as 1.5 30 . The total water consumption per square metre construction area of a house building is 1.11 L.…”

Evaluation of Cooperation during Project Delivery: Empirical Study on the Hydropower Industry in Southwest China

“…To start the simulation, an initial payoff matrix of two participants was set in Table 1. As taking cooperative strategies has advantages over non-cooperative strategies on Pareto optimum solution due to optimally sharing the resources of participants in cooperation (Schreider et al 2013;Madani 2011;Qin et al 2010;Deidda et al 2009;Suzuki and Nakayama 1976), it was set that the overall payoff of the two participants who both take cooperative strategies is highest compared to the other three non-cooperative circumstances. Specifically, it was set that the payoffs of the two participants are 30 respectively (with an overall payoff of 60) when they both take cooperative strategies, for the reason that project benefits should be equitably shared among parties (Tang et al 2008;Zhang et al 2006).…”

“…The cooperative models with components of project development, environment, economic gains and special interest groups have been used to reach a more equitable distribution of payoffs among participants and improve the effectiveness of sharing information (Schreider et al 2013;Madani 2011;Deidda et al 2009;Suzuki and Nakayama 1976). These studies indicate the advantages of taking cooperative strategies over non-cooperative strategies based on Pareto optimum solutions (Schreider et al 2013;Madani 2011;Qin et al 2010;Deidda et al 2009;Suzuki and Nakayama 1976). Studying participants' cooperative behaviors (e.g.…”