Analytical Model for Analyzing Construction Claims and Opportunistic Bidding
Publication: Journal of Construction Engineering and Management
Volume 130, Issue 1
Abstract
Construction claims are considered by many project participants to be one of the most disruptive and unpleasant events of a project. Construction claims occur for various reasons. There is a need to understand the dynamic nature between construction claims and opportunistic bidding. An analytical model, the Claims Decision Model (CDM), based on “game theory,” was developed to study opportunistic bidding and construction claims. This model explains (1) how people behave during a potential or existing claiming situation, (2) how different claiming situations are related to opportunistic bidding behavior, and (3) what situations encourage or discourage opportunistic behavior. The results of this pilot study indicate that the equilibrium solution of a construction claim is to negotiate and settle, which concurs with most of the claim cases in the industry. The possible range of a negotiation settlement is obtained in this paper. The model provides the rationale for recent innovations to manage disputes. The model can also help project owners identify the possibility of opportunistic bidding, and can assist the project participants in analyzing construction claims.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 130 • Issue 1 • February 2004
Pages: 94 - 104
Copyright
Copyright © 2004 American Society of Civil Engineers.
History
Received: Mar 19, 2002
Accepted: Aug 9, 2002
Published online: Jan 16, 2004
Published in print: Feb 2004
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