Xiang, P; Zhou, J; Zhou, X and Ye, K (2012) Construction project risk management based on the view of asymmetric information. Journal of Construction Engineering and Management, 138(11), pp. 1303-1311. ISSN 0733-9364
Abstract
Construction projects are facing a greater number of uncertainties and more severe risks, which could cause much bigger losses than in the past. From the perspective of information economics, asymmetric information gives rise to opportunistic behavior, which is the primary cause of loss of faith and increased risk in the construction market. Asymmetric information theory is helpful for solving problems arising in construction projects and for preventing construction project risk. The main objective in this paper is to explore risk prevention mechanisms and measures in construction projects on the basis of asymmetric information theory. The research processes are (1) exploring the relationship between asymmetric information and construction project risk and exploring the mechanisms of construction project risk formation on the basis of asymmetric information; (2) analyzing the issue of asymmetric information in construction projects and creating an information model of construction project management; (3) proposing measures for resolving information asymmetries of construction projects. The contributions to the literature are (1) an application of asymmetric information theory to construction project management, confirming that asymmetric information theory is helpful for resolving problems and preventing construction project risk; (2) showing that incomplete information, especially asymmetric information, is the essential cause of construction project risk.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | asymmetric information theory; construction project management; construction project risk; construction project risk management; project management |
| Index terms: | construction project, information theory, information asymmetry, prevention, project management, construction market, construction project management, risk management, opportunistic behaviour |
| Subjects: | production management, financial risk, project management theory and practice, market analysis, risk assessment, transaction economics, business, knowledge organization and systems |
| Topics: | Risk Management, Information Management, Project Management, Research Practice, Business Strategy, Cost Management, Organizational Design |
| 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