Game analysis of design incentives for delivering international hydropower EPC projects

doi:10.16511/j.cnki.qhdxxb.2016.24.003

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Abstract China's hydropower construction companies need to strengthen their design management for international EPC (engineering-procurement-construction) project delivery. Gaming theory was used to develop single-period and multi-period incentive models to investigate the incentive mechanisms between contractors and designers. The models were used to analyze 7 international EPC projects. The results show that:1) Design incentives promote optimum designs which add value to the project and benefit both contractors and designers. 2) Single-period incentives can lead to opportunistic behaviour, which may reduce the effectiveness of the design incentives. 3) The introduction of strategic benefits in multi-period incentives effectively strengthens the stability of long-term cooperation and maximize the benefits to contractors and designers in the long run. 4) EPC contractors should establish partnering relationships with qualified designers based on incentive evaluations.

Keywords engineering-procurement-construction (EPC) projects hydropower engineering design management incentive mechanism game theory

ZTFLH:

F407.9

Issue Date: 15 April 2016

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	TANG Wenzhe
	WANG Tengfei
	SUN Hongxin
	QI Dashan

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TANG Wenzhe,WANG Tengfei,SUN Hongxin, et al. Game analysis of design incentives for delivering international hydropower EPC projects[J]. Journal of Tsinghua University(Science and Technology), 2016, 56(4): 354-359.

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http://jst.tsinghuajournals.com/EN/10.16511/j.cnki.qhdxxb.2016.24.003 OR http://jst.tsinghuajournals.com/EN/Y2016/V56/I4/354

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