Rent-seeking decisions of the main participants in construction projects based on evolutionary-game and system dynamics
Abstract
The performance of a construction project can be severely harmed by its participants’ rent-seeking. In order to prevent such attempt, this research integrates the evolutionary game theory with system dynamics method to simulate the impact of the change of some factors that may cause/reduce rent-seeking. Based on the analysis of the behavioral characteristics and interactive relationships of the main participants (the owner, supervisor, and contractor), an evolutionary game model is constructed and simulated with the method of system dynamics based on the replication dynamic equation of the mixed strategy solution of the three-party static game model. By assigning the parameters of project scale, supervision likelihood, supervision success rate, supervision cost, and penalty intensity, the interaction mechanism of the participants on each factor is revealed through a case-based simulation. The results show that the impacts of these factors on participants’ rent-seeking decisions are significantly different. Furthermore, some management suggestions are provided to prevent rent-seeking for project owner according to the research conclusions. This research can help the project owners take proper measures to prevent rent-seeking of the supervisors and the contractors to improve the performances of the projects.
Keyword : project management, project participants, rent-seeking, evolutionary game, system dynamics
How to Cite
Zuo, W., Wang, Q., & Li, P. (2022). Rent-seeking decisions of the main participants in construction projects based on evolutionary-game and system dynamics. Journal of Civil Engineering and Management, 28(2), 106–119. https://doi.org/10.3846/jcem.2022.16159
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Feng, Q., Shi, X.-j., & Xu, W. (2015). Power rent-seeking governance in safety supervision system of projects: Based on evolutionary game model among the subjects. Chinese Journal of Management Science, 23(Special Issue), 9–14.
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Roca, C. P., Cuesta, J. A., & Sánchez, A. (2009). Evolutionary game theory: Temporal and spatial effects beyond replicator dynamics. Physics of Life Reviews, 6(4), 208–249. https://doi.org/10.1016/j.plrev.2009.08.001
Shiwei, W. A. N., Yugui, C. A. O., & Zhongzhi, Y. (2006). Game analysis of rent-seeking of engineering supervisors based on principal-agents. Industrial Engineering Journal, 9(4), 46–48, 59.
Snaith, M. S., & Khan, M. U. (2008). Deleterious effects of corruption in the roads sector. Proceedings of the Institution of Civil Engineers-Transport, 161(4), 231–235. https://doi.org/10.1680/tran.2008.161.4.231
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Shurong, Z., & Miao, P. (2012). Rent-seeking behaviors analysis in engineering supervision based on the game theory. Systems Engineering Procedia, 4, 455–459. https://doi.org/10.1016/j.sepro.2012.01.010
Tabish, S. Z. S., & Jha, K. N. (2011). Analyses and evaluation of irregularities in public procurement in India. Construction Management and Economics, 29(3), 261–274. https://doi.org/10.1080/01446193.2010.549138
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Tullock, G. (2005). The rent-seeking society (The Selected Works of Gordon Tullock, Vol. 5). Liberty Fund.
Wang, B., & Cheng, Y. (2013). Project management issues analysis based on rent-seeking theory. Journal of Engineering Management, 27(1), 34–38.
Wang, B., Xu, Y., & Li, Z. (2005). A dynamic game analysis on disposal of rent-seeking phenomina with incomplete information. Systems Engineering, 23(10), 81–85.
Wang, X., Zhao, H., & Yu, G. (2008). The countermeasure study on rent-seeking of supervision in engineering construction fields. Soft Science, 22(3), 96–99.
Wu, Y., & Peng, F. (2013). Contractor’s rent-seeking game in different stages of construction. Engineering Journal of Wuhan University, 46(6), 780–783.
Xiang, P., & Ren, H. (2010). Behavioural game analysis for three participants in construction project based on theory of information asymmetries. Engineering Sciences, 2010(9), 101–106.
Xiang, P.-c., Kong, D.-p., & Liu, C.-y. (2009). Behavioral game analysis for participants in construction project. Mathematics in Practice and Theory, 39(10), 83–89.
Xie, S. (2007). Economic game theory (3rd ed.). Fudan University Press.
Yang, R. J., Jayasuriya, S., Gunarathna, C., Arashpour, M., Xue, X., & Zhang, G. (2018). The evolution of stakeholder management practices in Australian mega construction projects. Engineering Construction & Architectural Management, 25(6), 690–706. https://doi.org/10.1108/ECAM-07-2016-0168
Zhang, B., Le, Y., Xia, B., & Skitmore, M. (2017). Causes of business-to-government corruption in the tendering process in China. Journal of Management in Engineering, 33(2), 05016022. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000479
Boudreaux, C. J., Nikolaev, B. N., & Holcombe, R. G. (2018). Corruption and destructive entrepreneurship. Small Business Economics, 51(1), 181–202. https://doi.org/10.1007/s11187-017-9927-x
Brown, J., & Loosemore, M. (2015). Behavioural factors influencing corrupt action in the Australian construction industry. Engineering Construction and Architectural Management, 22(4), 372–389. https://doi.org/10.1108/ECAM-03-2015-0034
Chan, A. P. C., & Owusu, E. K. (2017). Corruption forms in the construction industry: Literature review. Journal of Construction Engineering and Management, 143(8), 04017057. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001353
Deng, F., Liu, G., & Jin, Z. (2013). Factors formulating the competitiveness of the Chinese construction industry: Empirical investigation. Journal of Management in Engineering, 29(4), 435–445. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000161
Di, X., & Ji, Y. (2012). Engineering corruption: formation mechanism and prevention strategy. Theoretical Exploration, 2012(4), 48–51, 61.
Feng, Q., Shi, X.-j., & Xu, W. (2015). Power rent-seeking governance in safety supervision system of projects: Based on evolutionary game model among the subjects. Chinese Journal of Management Science, 23(Special Issue), 9–14.
Feng, Q., Shi, X., & Zhang, J. (2019). Influence of rent-seeking on safety supervision in Chinese construction: Based on a simulation technology. Technological Forecasting and Social Change, 138, 1–9. https://doi.org/10.1016/j.techfore.2018.10.016
Fernandez-Dengo, M., Naderpajouh, N., & Hastak, M. (2013). Risk assessment for the housing market in Mexico. Journal of Management in Engineering, 29(2), 122–132. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000128
Goldie-Scot, H. (2008). Briefing: Corruption in construction in developing countries. Proceedings of the Institution of Civil Engineers-Municipal Engineer, 161(4), 211–213. https://doi.org/10.1680/muen.2008.161.4.211
Guo, S., Zhang, P., & Yang, J. (2018). System dynamics model based on evolutionary game theory for quality supervision among construction stakeholders. Journal of Civil Engineering and Management, 24(4), 318–330. https://doi.org/10.3846/jcem.2018.3068
Huang, D., & Chen, L. (2012). Analysis and countermeasure of government rent-seeking behavior in large-scale project construction. Seeker, 2012(10), 205–207, 270.
Iqbal, N., & Daly, V. (2014). Rent seeking opportunities and economic growth in transitional economies. Economic Modelling, 37, 16–22. https://doi.org/10.1016/j.econmod.2013.10.025
Kenny, C. (2009). Transport construction, corruption and developing countries. Transport Reviews, 29(1), 21–41. https://doi.org/10.1080/01441640802075760
Kyriacou, A. P., Muinelo-Gallo, L., & Roca-Sagales, O. (2015). Construction corrupts: empirical evidence from a panel of 42 countries. Public Choice, 165(1–2), 123–145. https://doi.org/10.1007/s11127-015-0297-0
Le, Y., Shan, M., Chan, A. P. C., & Hu, Y. (2014). Overview of corruption research in construction. Journal of Management in Engineering, 30(4), 02514001. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000300
Li, Y. (2009). Investigation of rent-seeking in construction project and process of supervision [Master thesis]. Beijing Jiaotong University, Beijing.
Liu, T., Huang, W., Xu, W., & Wu, Q. (2010). Equilibrium strategies of rent-seeking games of developer based on improved Tullock model. Journal of Tongji University. Natural Science, 38(12), 1851–1856.
Mei, T., Wang, Q., Xiao, Y., & Yang, M. (2017). Rent-seeking behavior of BIM-and IPD-based construction project in China. Engineering Construction and Architectural Management, 24(3), 514–536. https://doi.org/10.1108/ecam-11-2015-0178
Owusu, E. K., Chan, A. P. C., & Shan, M. (2017). Causal factors of corruption in construction project management: An overview. Science and Engineering Ethics, 25(1), 1–31. https://doi.org/10.1007/s11948-017-0002-4
Qin, L. (2017). Study on rent seeking of bidding and system supervision in construction project [Master thesis]. Chongqing University, Chong-qing.
Roca, C. P., Cuesta, J. A., & Sánchez, A. (2009). Evolutionary game theory: Temporal and spatial effects beyond replicator dynamics. Physics of Life Reviews, 6(4), 208–249. https://doi.org/10.1016/j.plrev.2009.08.001
Shiwei, W. A. N., Yugui, C. A. O., & Zhongzhi, Y. (2006). Game analysis of rent-seeking of engineering supervisors based on principal-agents. Industrial Engineering Journal, 9(4), 46–48, 59.
Snaith, M. S., & Khan, M. U. (2008). Deleterious effects of corruption in the roads sector. Proceedings of the Institution of Civil Engineers-Transport, 161(4), 231–235. https://doi.org/10.1680/tran.2008.161.4.231
Sohail, M., & Cavill, S. (2008). Accountability to prevent corruption in construction projects. Journal of Construction Engineering and Manage-ment, 134(9), 729–738. https://doi.org/10.1061/(ASCE)0733-9364(2008)134:9(729)
Shurong, Z., & Miao, P. (2012). Rent-seeking behaviors analysis in engineering supervision based on the game theory. Systems Engineering Procedia, 4, 455–459. https://doi.org/10.1016/j.sepro.2012.01.010
Tabish, S. Z. S., & Jha, K. N. (2011). Analyses and evaluation of irregularities in public procurement in India. Construction Management and Economics, 29(3), 261–274. https://doi.org/10.1080/01446193.2010.549138
Tullock, G. (2001). Efficient rent-seeking. In A. A. Lockard, & G. Tullock (Eds), Efficient rent-seeking (pp. 3–16). Springer. https://doi.org/10.1007/978-1-4757-5055-3_2
Tullock, G. (2005). The rent-seeking society (The Selected Works of Gordon Tullock, Vol. 5). Liberty Fund.
Wang, B., & Cheng, Y. (2013). Project management issues analysis based on rent-seeking theory. Journal of Engineering Management, 27(1), 34–38.
Wang, B., Xu, Y., & Li, Z. (2005). A dynamic game analysis on disposal of rent-seeking phenomina with incomplete information. Systems Engineering, 23(10), 81–85.
Wang, X., Zhao, H., & Yu, G. (2008). The countermeasure study on rent-seeking of supervision in engineering construction fields. Soft Science, 22(3), 96–99.
Wu, Y., & Peng, F. (2013). Contractor’s rent-seeking game in different stages of construction. Engineering Journal of Wuhan University, 46(6), 780–783.
Xiang, P., & Ren, H. (2010). Behavioural game analysis for three participants in construction project based on theory of information asymmetries. Engineering Sciences, 2010(9), 101–106.
Xiang, P.-c., Kong, D.-p., & Liu, C.-y. (2009). Behavioral game analysis for participants in construction project. Mathematics in Practice and Theory, 39(10), 83–89.
Xie, S. (2007). Economic game theory (3rd ed.). Fudan University Press.
Yang, R. J., Jayasuriya, S., Gunarathna, C., Arashpour, M., Xue, X., & Zhang, G. (2018). The evolution of stakeholder management practices in Australian mega construction projects. Engineering Construction & Architectural Management, 25(6), 690–706. https://doi.org/10.1108/ECAM-07-2016-0168
Zhang, B., Le, Y., Xia, B., & Skitmore, M. (2017). Causes of business-to-government corruption in the tendering process in China. Journal of Management in Engineering, 33(2), 05016022. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000479