Using Bargaining-Game Theory for Negotiating Concession Period for BOT-Type Contract

This paper extends the build-operate-transfer (BOT) concession model (BOTCcM) to a new method for identifying a concession period by using bargaining-game theory. Concession period is one of the most important decision variables in arranging a BOT-type contract, and there are few methodologies avail...

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Bibliographic Details
Published in:Journal of construction engineering and management 2007-05, Vol.133 (5), p.385-392
Main Authors: Shen, L. Y, Bao, H. J, Wu, Y. Z, Lu, W. S
Format: Article
Language:English
Subjects:
Applied sciences
Building economics. Cost
Buildings. Public works
Exact sciences and technology
Project management. Process of design
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Summary:This paper extends the build-operate-transfer (BOT) concession model (BOTCcM) to a new method for identifying a concession period by using bargaining-game theory. Concession period is one of the most important decision variables in arranging a BOT-type contract, and there are few methodologies available for helping to determine the value of this variable. The BOTCcM presents an alternative method by which a group of concession period solutions are produced. Nevertheless, a typical weakness in using BOTCcM is that the model cannot recommend a specific time span for concessionary. This paper introduces a new method called BOT bargaining concession model (BOTBaC) to enable the identification of a specific concession period, which takes into account the bargaining behavior of the two parties concerned in engaging a BOT contract, namely, the investor and the government concerned. The application of BOTBaC is demonstrated through using an example case.
ISSN:0733-9364
1943-7862
DOI:10.1061/(ASCE)0733-9364(2007)133:5(385)