Ho, S P and Liu, L Y (2004) Analytical model for analyzing construction claims and opportunistic bidding. Journal of Construction Engineering and Management, 130(1), pp. 94-104. ISSN 0733-9364
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.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | analytical techniques; bids; claims; contracts; litigation |
| Index terms: | owner, dispute, litigation, opportunistic behaviour, negotiation, game theory, construction claim, analytical model, bidding |
| Subjects: | dispute resolution, business, decision models, bidding, theoretical framing, sociology, conflict resolution, payment |
| Topics: | Legal Issues, Organizational Design, Contract Administration, Research Practice, Stakeholder Management, Procurement |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here