Application Study Of Game Model In Construction Claim Negotiations Considering Discount Factor

The project claim, an effective way for both contract parties to protect their rights, can reflect the employer's or contractor's operational management level. Besides profit opportunities, there can be competition and challenge. In a claim dispute settlement, we have to give full consideration not only to claimable items and the claim amount, but also the dispute settlement cost, to improve claim efficiency and maximize benefits. The international project claim practices show that friendly claim negotiation in dispute settlement can be more effective, convenient and economical than an arbitration or mediation.On the base of defining a claimable item and comparing claim amount methods, the thesis analyzes both parties'strategies in a negotiation. It particularly studies how to define the claim cost based on the principle of maximizing benefits when establishing a claim game model. Through analyzing explicit and implicit cost in a negotiation, the thesis studies the discount factor's influence on parties'utility, which is applied to Bayesian-Nash equilibrium to simulate bargaining process. Both parties continually revise their negotiation strategies in each round. Based on the biggest risk to bear and assessing opponents'claim limit, this thesis, using Zeuthen's negotiation strategy, analyzes and defines a concession range. And then it goes into the next round of offer, assessment and concession until both parties reach an agreement.Through calculation of a simulation case, this thesis, comparing the established game model considering discount factor and the model without it, gets a result showing that the former negotiation rounds are fewer than the latter and that the negotiation cost also decreases. It displays the usefulness of the claim negotiation game model considering a discount factor in an actual negotiation.