The Graph Decision Model for Risk Allocation in Design-Build Contracts; Game Theory approach

Document Type : Research Article


1 Assistant Professor, Islamic Azad University West Tehran branch

2 Islamic Azad University, South Tehran


Risk allocation, the definition and division of responsibility associated with a possible ‎future loss or gain, seeks to assign responsibility for a variety of hypothetical circumstances ‎should a project not proceed as planned. The result of improper risk allocation is increased ‎costs, project delays and services, which cause loss of value-for-money for the public interest. This paper introduced a decision support system based on the graph model for systematically resolving construction risk allocation. In this model mainly assumed success of a contract needs to ‎agreement on how risks are allocated by parties. The graph analysis process considers ‎the decision-makers, their decision options, and their relative preferences when modeling ‎risk allocation negotiation as a game theory problem. Owners could also use the model to perform an in-depth stability analysis in order to ‎ascertain the ‎possible compromise resolutions or equilibrium. The model predicts the sequence ‎of decisions that took place in the dispute and furnishes an array of useful strategic insights ‎about the risk allocation renegotiation. Moreover, the model to determine how ‎changes in preferences can affect the equilibrium results executes a sensitivity analysis. This risk allocation procedure is ‎useful for both researchers and practitioners to better deal with the dispute-prone nature of ‎ construction contracts.‎


Main Subjects

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