A game theory approach for competition and cooperation among project’s subcontractors with interaction activities

Hafezalkotob, A.; Hoseinpour, E.; Damghani, K.

Growing Science » Journal of Project Management » A game theory approach for competition and cooperation among project’s subcontractors with interaction activities

Journals

JPM Volumes

Volume 1 (8)
- Issue 1 (5)
- Issue 2 (3)

Volume 2 (13)
- Issue 1 (4)
- Issue 2 (3)
- Issue 3 (3)
- Issue 4 (3)

Volume 3 (17)
- Issue 1 (4)
- Issue 2 (5)
- Issue 3 (4)
- Issue 4 (4)

Volume 4 (24)
- Issue 1 (4)
- Issue 2 (8)
- Issue 3 (8)
- Issue 4 (4)

Volume 5 (20)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (5)

Volume 6 (20)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (5)

Volume 7 (21)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (6)

Volume 8 (21)
- Issue 1 (6)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (5)

Volume 9 (35)
- Issue 1 (6)
- Issue 2 (5)
- Issue 3 (9)
- Issue 4 (15)

Volume 10 (15)
- Issue 1 (15)

Countries

Journal of Project Management

ISSN 2371-8374 (Online) - ISSN 2371-8366 (Print) Quarterly Publication Volume 2 Issue 2 pp. 71-86 , 2017

A game theory approach for competition and cooperation among project’s subcontractors with interaction activities Pages 71-86 Download PDF

Authors: Ashkan Hafezalkotob, Elahe Hoseinpour, Kaveh Khalili Damghani

DOI: 10.5267/j.jpm.2017.6.002

Keywords:

Abstract: Some projects are often performed by many subcontractors that cooperate with each other and some of them are conducted by outsourcing them to several firms; so subcontractors carry out activities in competition. Appropriate trade-off between time and cost and achieving more benefit and cost saving are objectives of both models. In this paper, it is investigated that how different subcontractors of a project can cooperate to achieve more advantages if possible and how sub-contractors can compete to make the results better and find the optimum cost to minimize the time for each of them. The competition here does not mean eliminating a competitor, but the aim is to challenge the contractors in order to choose the best decision. The purpose of this study is to address the challenges in time and cost management and to find more profit allocation among subcontractors and fair competition for fair allocation as well. A model based on cooperative game theory in time/cost trade-off problem of projects is suggested and then a competition model among subcontractors based on non-cooperative game theory is proposed. A case study is rep-resented to comprehensively illustrate the problem, the cooperative techniques of cooperative game theory, and the payoff matrix of non-cooperative model among subcontractors. Results of the proposed model reveal that subcontractors can obtain higher profit from cooperation if pos-sible. When they outsource the project and compete with each other, they must consider the in-teraction activities and choose the best strategies for cost saving and gain more reward from the client. Moreover, it is found that some techniques such as Shapley value, Core, Max-Min Core, or Equal Profit Method (EPM) are able to fairly assign extra profit of cooperation, and using the payoff matrix, Nash equilibrium, and Nash bargaining helps to find the optimum point to mini-mize time and cost for interaction activities state.

How to cite this paper

 Hafezalkotob, A., Hoseinpour, E & Damghani, K. (2017). A game theory approach for competition and cooperation among project’s subcontractors with interaction activities.Journal of Project Management, 2(2), 71-86.

Refrences

Arsenyan, J., Büyüközkan, G., & Feyzioğlu, O. (2015). Modeling collaboration formation with a game theory approach. Expert Systems with Applications, 42(4), 2073-2085.
Asgari, M. S., & Afshar, A. (2008, August). Modeling subcontractors cooperation in time; cooperative game theory approach. In First International Conference on Construction in Developing Countries (ICCIDC-I) (pp. 312-319).
Asgari, S., Afshar, A., & Madani, K. (2013). Cooperative game theoretic framework for joint resource management in construction. Journal of Construction Engineering and Management, 140(3), 04013066.
Brânzei, R., Ferrari, G., Fragnelli, V., & Tijs, S. (2002). Two approaches to the problem of sharing de-lay costs in joint projects. Annals of Operations Research, 109(1-4), 359-374.
Cakmak, P. I., & Tas, E. (2012). Strategic planning practices of contractor firms in Turkey. Procedia-Social and Behavioral Sciences, 58, 40-46.
Canegallo, C., Ortona, G., Ottone, S., Ponzano, F., & Scacciati, F. (2008). Competition versus coop-eration: Some experimental evidence. The Journal of socio-economics, 37(1), 18-30.
Estévez-Fernández, A., Borm, P., & Hamers, H. (2007) Project games International Journal of Game Theory. Volume, 36, 149-176.
Estévez-Fernández, A. (2012). A game theoretical approach to sharing penalties and rewards in pro-jects. European Journal of Operational Research, 216(3), 647-657.
Kadefors, A. (2004). Trust in project relationships—inside the black box. International Journal of pro-ject management, 22(3), 175-182.
Lozano, S., Moreno, P., Adenso-Díaz, B., & Algaba, E. (2013). Cooperative game theory approach to allocating benefits of horizontal cooperation. European Journal of Operational Research, 229(2), 444-452.
Lu, S., & Hao, G. (2013). The influence of owner power in fostering contractor cooperation: Evidence from China. International Journal of Project Management, 31(4), 522-531.
Mouritsen, J. (1999). The flexible firm: strategies for a subcontractor’s management con-trol. Accounting, Organizations and society, 24(1), 31-55.
Parrod, N., Thierry, C., Fargier, H., & Cavaille, J. B. (2007). Cooperative subcontracting relationship within a project supply chain: A simulation approach. Simulation Modelling Practice and Theo-ry, 15(2), 137-152.
Perng, Y. H., Chen, S. J., & Lu, H. J. (2005). Potential benefits for collaborating formwork subcon-tractors based on co-operative game theory. Building and Environment, 40(2), 239-244.
Rahman, S. H. A., Endut, I. R., Faisol, N., & Paydar, S. (2014). The Importance of Collaboration in Construction Industry from Contractors’ Perspectives. Procedia-Social and Behavioral Scienc-es, 129, 414-421.
Riemann, S., & Spang, K. (2014). Application of Contractor's Knowledge in Public Financed Infra-structure Projects in Germany. Procedia-Social and Behavioral Sciences, 119, 202-209.
Segal, N. L., & Hershberger, S. L. (1999). Cooperation and competition between twins: Findings from a prisoner’s dilemma game. Evolution and Human Behavior, 20(1), 29-51.
Shapley, L. S. (1953). A value for n-person games. Annals of Mathematics Studies, 28, 307–317.
Suprapto, M., Bakker, H. L., Mooi, H. G., & Moree, W. (2015). Sorting out the essence of owner–contractor collaboration in capital project delivery. International Journal of Project Manage-ment, 33(3), 664-683.
Szajnfarber, Z., Stringfellow, M. V., & Weigel, A. L. (2010). The impact of customer–contractor in-teractions on spacecraft innovation: Insights from communication satellite history. Acta Astronauti-ca, 67(9), 1306-1317.
Vaaland, T. I. (2004). Improving project collaboration: start with the conflicts. International Journal of Project Management, 22(6), 447-454.
Vanhoucke, M. (2012). Project management with dynamic scheduling. Springer Berlin Heidelberg.
Xiong, B., Skitmore, M., Xia, B., Masrom, M. A., Ye, K., & Bridge, A. (2014). Examining the influ-ence of participant performance factors on contractor satisfaction: A structural equation mod-el. International Journal of Project Management, 32(3), 482-491.
Xu, T., Bower, D. A., & Smith, N. J. (2005). Types of collaboration between foreign contractors and their Chinese partners. International Journal of Project Management, 23(1), 45-53.