Concurrent Delay Analysis via Cooperative Game Theory
Publication: Construction Research Congress 2024
ABSTRACT
Despite various attempts throughout past decades to deal with concurrent delays in construction project schedules, they continue to be a vexing issue that has eluded an unambiguous solution. Prior studies have resorted to the prime contract, which only binds general contractor and owner, cannot be proven to be fair, and may even be biased. Therefore, this paper adopts a concept from cooperative game theory, the Shapley value, which apportions profits (which project participants seek to maximize). Creatively applying it to liquidated damages (which they seek to minimize), the model uses all participants’ actual finish dates as input to gain percentage shares of liquidated damages as output. Analyzing all possible coalitions among participants and assigning weights comprehensively assesses their marginal contributions to the project finish date. This generalized view of participants explicitly includes subcontractors, whom prior approaches typically ignored. An example demonstrates how the model also implies an early completion bonus. This yields compelling implications for real-world incentives that can be cast into future contract clauses.
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Construction Research Congress 2024
Pages: 218 - 227
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Published online: Mar 18, 2024
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