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Agent-based debt terms’ bargaining model to improve negotiation inefficiency in PPP projects
journal contributionposted on 2017-12-06, 00:00 authored by L Zhu, Xianbo ZhaoXianbo Zhao, DHK Chua
The negotiation of the debt terms of public-private partnership (PPP) projects is time consuming and expensive. Although attempts have been made to examine this negotiation inefficiency, there still lacks a theoretical model for this. The aim of this study is to develop an agent-based debt terms’ bargaining model that simulates the negotiation process and improves the negotiation inefficiency. This model was developed using bargaining game theory, time-dependent negotiation tactics, and a learning-based approach, and then validated on a real PPP project. Scenario simulations were also carried out to test the effect of the first offerer, negotiation tactics, and bargaining powers on the duration and payoff of the negotiation. Results show that the use of the negotiation tactics and learning ability can quickly finalize the negotiation, improving the negotiation inefficiency. Results also indicate that being the first offerer and possessing more bargaining power can make the player obtain a better payoff. The developed system can be used by decision makers to understand the reason for the lengthy negotiation and make improved strategies under different scenarios.
Number of Pages11
PublisherAmerican Society of Civil Engineers
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External Author AffiliationsNational University of Singapore; School of Engineering and Technology (2013- ); TBA Research Institute;