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Government regulation strategies for inhibiting opportunistic behaviors in construction projects

The construction industry has long been criticized for recurring accidents, wherein opportunistic behaviors are the primary cause of losing faith and increasing risk, infringing upon the interests of the state, society and people. While government regulation can be crucial in curbing opportunistic b...

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Detalles Bibliográficos
Autores principales: Cui, Lei, Liu, Gang, Luo, Lanjun
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10425911/
https://www.ncbi.nlm.nih.gov/pubmed/37588602
http://dx.doi.org/10.1016/j.heliyon.2023.e18579
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author Cui, Lei
Liu, Gang
Luo, Lanjun
author_facet Cui, Lei
Liu, Gang
Luo, Lanjun
author_sort Cui, Lei
collection PubMed
description The construction industry has long been criticized for recurring accidents, wherein opportunistic behaviors are the primary cause of losing faith and increasing risk, infringing upon the interests of the state, society and people. While government regulation can be crucial in curbing opportunistic behaviors, the existing mixed strategy game model fails to accurately capture the strategic interactions between the government, owner, supervisor, and contractor. To bridge this gap, we propose a multi-stage dynamic game model with asymmetric information in the context of a typical construction project, wherein two urgent opportunistic behaviors may arise: moral hazard and covert collusion. According to project characteristics, the regulatory issues are further classified as hidden information for general projects and hidden effort for dominant projects. On this basis, the government's optimal regulation strategies are derived, i.e., the optimal fines for poor quality and the optimal fine coefficient for quality effort reduction. Subsequently, several significant managerial implications are presented to summarize and analyze impacts of government regulation on construction projects. The findings show that government regulation can achieve systemic optimality but may hurt the owner's interests in some cases. This could potentially hinder the healthy development of the construction industry as the owner may forgo purchasing the construction project. Furthermore, general projects are more vulnerable to opportunistic behaviors as opposed to dominant projects. The developed model and derived regulatory strategy can assist the government in more effectively governing and controlling opportunistic behaviors. This research also contributes several valuable managerial insights into the domain of government regulation on construction projects.
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spelling pubmed-104259112023-08-16 Government regulation strategies for inhibiting opportunistic behaviors in construction projects Cui, Lei Liu, Gang Luo, Lanjun Heliyon Research Article The construction industry has long been criticized for recurring accidents, wherein opportunistic behaviors are the primary cause of losing faith and increasing risk, infringing upon the interests of the state, society and people. While government regulation can be crucial in curbing opportunistic behaviors, the existing mixed strategy game model fails to accurately capture the strategic interactions between the government, owner, supervisor, and contractor. To bridge this gap, we propose a multi-stage dynamic game model with asymmetric information in the context of a typical construction project, wherein two urgent opportunistic behaviors may arise: moral hazard and covert collusion. According to project characteristics, the regulatory issues are further classified as hidden information for general projects and hidden effort for dominant projects. On this basis, the government's optimal regulation strategies are derived, i.e., the optimal fines for poor quality and the optimal fine coefficient for quality effort reduction. Subsequently, several significant managerial implications are presented to summarize and analyze impacts of government regulation on construction projects. The findings show that government regulation can achieve systemic optimality but may hurt the owner's interests in some cases. This could potentially hinder the healthy development of the construction industry as the owner may forgo purchasing the construction project. Furthermore, general projects are more vulnerable to opportunistic behaviors as opposed to dominant projects. The developed model and derived regulatory strategy can assist the government in more effectively governing and controlling opportunistic behaviors. This research also contributes several valuable managerial insights into the domain of government regulation on construction projects. Elsevier 2023-07-27 /pmc/articles/PMC10425911/ /pubmed/37588602 http://dx.doi.org/10.1016/j.heliyon.2023.e18579 Text en © 2023 The Authors https://creativecommons.org/licenses/by-nc-nd/4.0/This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
spellingShingle Research Article
Cui, Lei
Liu, Gang
Luo, Lanjun
Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title_full Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title_fullStr Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title_full_unstemmed Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title_short Government regulation strategies for inhibiting opportunistic behaviors in construction projects
title_sort government regulation strategies for inhibiting opportunistic behaviors in construction projects
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10425911/
https://www.ncbi.nlm.nih.gov/pubmed/37588602
http://dx.doi.org/10.1016/j.heliyon.2023.e18579
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