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Agent-based debt terms’ bargaining model to improve negotiation inefficiency in PPP projects

journal contribution
posted on 06.12.2017, 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.

History

Volume

30

Issue

6

Start Page

1

End Page

11

Number of Pages

11

eISSN

1943-5487

ISSN

0887-3801

Location

United States

Publisher

American Society of Civil Engineers

Language

en-aus

Peer Reviewed

Yes

Open Access

No

Acceptance Date

11/12/2015

External Author Affiliations

National University of Singapore; School of Engineering and Technology (2013- ); TBA Research Institute;

Era Eligible

Yes

Journal

Journal of Computing in Civil Engineering