Financial Conflict Resolution for Public-Private Partnership Projects Using a Three-Phase Game Framework
Publication: Journal of Construction Engineering and Management
Volume 144, Issue 3
Abstract
Many countries use financial aids to expedite public-private partnership (PPP) projects, depending on their financial status and/or demand for additional infrastructure. Minimum revenue guarantees (MRGs) are one financial aid option that costs the Korean government US$2.7 billion in liabilities annually. To reduce these considerable expenditures, this study proposes resolving financial conflicts using a three-phase game framework with a bargaining phase, a ratification phase, and a decision-making phase. The first two phases are adopted from traditional two-level game theory, and the last phase is added to support sequential negotiations and multiple buyers. To confirm the usability of proposed framework, the authors conduct illustrative case applications with two representative real-life PPP cases. Case 1 shows that qualitative bargaining power can be accurately quantified, and Case 2 demonstrates that empirically calculated values can be used in negotiation practice. The framework proposed in this study reduces the range of negotiation, the time required to negotiate, and the damage caused by conflicts. Additionally, the frame is expected to support strategic negotiations and well-structured decisions in financial conflicts between key stakeholders.
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Data Availibility Statement
All data generated or analyzed during the study are included in the published paper. Information about the Journal’s data sharing policy can be found here: http://ascelibrary.org/doi/10.1061/%28ASCE%29CO.1943-7862.0001263.
Acknowledgments
This work was supported by the Korea Science and Engineering Foundation (KOSEF) via a grant funded by the Korean government (MOST) (No. NRF-2015R1A2A1A09007327).
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Information & Authors
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Published In
Journal of Construction Engineering and Management
Volume 144 • Issue 3 • March 2018
Copyright
©2017 American Society of Civil Engineers.
History
Received: Apr 17, 2017
Accepted: Sep 6, 2017
Published online: Dec 23, 2017
Published in print: Mar 1, 2018
Discussion open until: May 23, 2018
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