Share:


Evolutionary game analysis for rent-seeking behavior supervision of major infrastructure projects based on prospect theory

    Lelin Lv Affiliation
    ; Huimin Li Affiliation
    ; Zhuofu Wang Affiliation
    ; Chengyi Zhang Affiliation
    ; Ran Qiao Affiliation

Abstract

Major infrastructure projects (MIPs) possess significant strategic positions in the national economy and social development. However, recently, the rent-seeking behavior between supervision units and project contractors has intensified in project construction. This paper aims to study the behavior decision-making of stakeholders in rent-seeking behavior supervision system of MIPs. In the complex and uncertain environment of MIPs, game players have cognitive bias and value perception preference. Therefore, this study introduced prospect theory and constructed the perceived return matrix and evolutionary game model of MIP rent-seeking behavior supervision among project owners, supervision units, and project contractors. From the perspective of risk perception theory, the reasons for the behavioral tendencies of game participants and the conditions for the steady state of strategy selection were explored through system dynamics simulations. The results showed that the stable state of the optimal strategy in the rent-seeking behavior supervision system of MIPs is related to the cognitive bias of the game players and is influenced by the level of regulation cost, the intensity of punishment and the size of accident losses. The contribution of this study lies in providing theoretical basis and decision support for constructing a long-term preventive mechanism for rent-seeking activities in MIPs.


First published online 31 December 2021

Keyword : major infrastructure projects, rent-seeking behavior, evolutionary game analysis, prospect theory, supervision mechanism

How to Cite
Lv, L., Li, H., Wang, Z., Zhang, C., & Qiao, R. (2022). Evolutionary game analysis for rent-seeking behavior supervision of major infrastructure projects based on prospect theory. Journal of Civil Engineering and Management, 28(1), 6–24. https://doi.org/10.3846/jcem.2021.15852
Published in Issue
Jan 11, 2022
Abstract Views
1204
PDF Downloads
829
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Aidt, T. S. (2016). Rent seeking and the economics of corruption. Constitutional Political Economy, 27(2), 142–157. https://doi.org/10.1007/s10602-016-9215-9

Asilian-Mahabadi, H., Khosravi, Y., Hassanzadeh-Rangi, N., Hajizadeh, E., & Behzadan, A. H. (2018). A qualitative investigation of factors influencing unsafe work behaviors on construction projects. Work, 61(2), 281–293. https://doi.org/10.3233/wor-182799

Barberis, N. C. (2013). Thirty years of prospect theory in economics: A review and assessment. Journal of Economic Perspectives, 27(1), 173–195. https://doi.org/10.1257/jep.27.1.173

Cao, G., & Zhou, L. (2021). The optimal PPP model of emergency rescue service. Discrete Dynamics in Nature and Society, 2021, 8413786. https://doi.org/10.1155/2021/8413786

Chen, H., Feng, Q., & Cao, J. (2014). Rent-seeking mechanism for safety supervision in the Chinese coal industry based on a tripartite game mod-el. Energy Policy, 72(9), 140–145. https://doi.org/10.1016/j.enpol.2014.04.017

Chen, H., Feng, Q., Zhu, D., Han, S., & Long, R. (2016). Impact of rent-seeking on productivity in Chinese coal mine safety supervision: A simulation study. Energy Policy, 93(6), 315–329. https://doi.org/10.1016/j.enpol.2016.02.054

Chen, M., Tian, S., & Chen, P. (2015). Evolutionary game analysis between service of public library and the investment of government. In the 7th International Conference on Intelligent Human-Machine Systems and Cybernetics, Hangzhou, China. https://doi.org/10.1109/IHMSC.2015.174

Cheng, L., & Yu, T. (2018). Nash equilibrium-based asymptotic stability analysis of multi-group asymmetric evolutionary games in typical scenario of electricity market. IEEE Access, 6, 32064–32086. https://doi.org/10.1109/access.2018.2842469

Deptula, P., Bell, Z. I., Zegers, F. M., Licitra, R. A., & Dixon, W. E. (2018). Single agent indirect herding via approximate dynamic programming. In the 57th IEEE Conference on Decision and Control, Miami Beach, FL., USA. https://doi.org/10.1109/CDC.2018.8619066

Feng, Q., Shi, X., & Zhang, J. (2019). Influence of rent-seeking on safety supervision in Chinese construction: Based on a simulation technology. Technological Forecasting and Social Change, 138(1), 1–9. https://doi.org/10.1016/j.techfore.2018.10.016

Flyvbjerg, B. (2014). What you should know about megaprojects and why: An overview. Project Management Journal, 45(2), 6–19. https://doi.org/10.1002/pmj.21409

Flyvbjerg, B., & Turner, J. R. (2018). Do classics exist in megaproject management? International Journal of Project Management, 36(2), 334–341. https://doi.org/10.1016/j.ijproman.2017.07.006

Friedman, D. (1998). On economic application of evolutionary game theory. Journal of Evolutionary Economics, 8(1), 15–43. https://doi.org/10.1007/s001910050054

Gong, S., Gao, X., Li, Z., & Chen, L. (2021). Developing a dynamic supervision mechanism to improve construction safety investment supervision efficiency in China: Theoretical simulation of evolutionary game process. International Journal of Environmental Research and Public Health, 18(7), 3594. https://doi.org/10.3390/ijerph18073594

Gu, S., Zhang, P., & Yang, J. (2018). System dynamics model based on evolutionary game theory for quality supervision among construction stakeholders. Journal of Civil Engineering and Management, 24(4), 318–330. https://doi.org/10.3846/jcem.2018.3068

He, H., & Shan, B. (2021). Rent dissipation and administration of mining rent-seeking activities in resource-rich regions. Arabian Journal of Geo-sciences, 14(3), 171. https://doi.org/10.1007/s12517-021-06480-1

Hu, Y. C., & Shen, Q. P. (2001). A system dynamics study of the development of the housing industry in Hong Kong. Systems Engineering Theory and Practice, 21(7), 32–37.

Ibarrondo-Davila, M. P., Lopez-Alonso, M., & Rubio-Gamez, M. C. (2015). Managerial accounting for safety management. The case of a Spanish construction company. Safety Science, 79(11), 116–125. https://doi.org/10.1016/j.ssci.2015.05.014

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. https://doi.org/10.2307/1914185

Kim, Y. A., Ryoo, B. Y., Kim, Y. S., & Huh, W. C. (2013). Major accident factors for effective safety management of highway construction projects. Journal of Civil Engineering and Management, 139(6), 628–640. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000640

Lai, Y., & Li, Y. (2013). The research on theory and applications of evolutionary game dynamics. In the International Conference on Information Engineering for Mechanics and Materials, Hangzhou, China. https://doi.org/10.4028/www.scientific.net/AMM.422.309

Li, X. L. (2017). Evolution game analysis of public-private partnership projects regulatory with consideration of reputation. Journal of Systems Engineering, 32(2), 199–206. https://doi.org/10.13383/j.cnki.jse.2017.02.006

Li, T. H. Y., Ng, S. T., & Skitmore, M. (2013). Evaluating stakeholder satisfaction during public participation in major infrastructure and construction projects: A fuzzy approach. Automation in Construction, 29(1), 123–135. https://doi.org/10.1016/j.autcon.2012.09.007

Li, Z., Tan, D. B., Zhang, S., Wang, R. P., & Wang, X. B. (2014). Design and development of management information system for water project construction. Journal of Yangtze River Scientific Research Institute, 31(1), 66–71.

Licitra, R. A., Bell, Z. I., & Dixon, W. E. (2019). Single-agent indirect herding of multiple targets with uncertain dynamics. IEEE Transactions on Robotics, 35(4), 847–860. https://doi.org/10.1109/tro.2019.2911799

Liu, K., Liu, Y., Zhou, H., Kou, Y., Ji, Q., & Li, D. (2021). Evolutionary game and numerical simulation of participants’ collaborative behavior in integrated project delivery project. Alexandria Engineering Journal, 60(1), 373–385. https://doi.org/10.1016/j.aej.2020.08.038

Liu, L., Zhao, Q., & Bi, Y. (2020). Why rent-seeking behavior may exist in Chinese mining safety production inspection system and how to alleviate it: A tripartite game analysis. Resources Policy, 69(12), 101841. https://doi.org/10.1016/j.resourpol.2020.101841

Liu, P., Jin, F., Zhang, X., Su, Y., & Wang, M. (2011). Research on the multi-attribute decision-making under risk with interval probability based on prospect theory and the uncertain linguistic variables. Knowledge-Based Systems, 24(4), 554–561. https://doi.org/10.1016/j.knosys.2011.01.010

Liu, Z., Sui, Y., Jin, Z., & Yang, X. (2018). Evolution of major infrastructure projects social responsibility: From a global perspective. Journal of Systems and Management, 27(1), 101–108. https://doi.org/10.3969/j.issn.1005-2542.2018.01.013

Ma, T., Ding, J., Wang, Z., & Skibniewski, M. J. (2020). Governing government-project owner relationships in water megaprojects: a concession game analysis on allocation of control rights. Water Resources Management, 34(13), 4003–4018. https://doi.org/10.1007/s11269-020-02627-z

Mei, T. T., Wang, Q. K., Xiao, Y. P., & Yang, M. (2017). Rent-seeking behavior of BIM-and IPD-based construction project in China. Engineering Construction and Architectural Management, 24(3), 514–536. https://doi.org/10.1108/ecam-11-2015-0178

Shen, H., Peng, Y., & Guo, C. (2018). Analysis of the evolution game of construction and demolition waste recycling behavior based on prospect theory under environmental regulation. International Journal of Environmental Research and Public Health, 15(7), 1518. https://doi.org/10.3390/ijerph15071518

Si, T. M., & Zhu, Y. (2008). Dynamic business analysis methods: systems thinking and modeling of complex worlds. Tsinghua University Press.

Taylor, P. D., & Jonker, L. B. (1978). Evolutionarily stable strategies and game dynamics. Mathematical Biosciences, 40(1–2), 145–156. https://doi.org/10.1016/0025-5564(78)90077-9

Trepel, C., Fox, C. R., & Poldrack, R. A. (2005). Prospect theory on the brain? Toward a cognitive neuroscience of decision under risk. Cognitive Brain Research, 23(1), 34–50. https://doi.org/10.1016/j.cogbrainres.2005.01.016

Wang, C., Lee, Y. L., Yap, J., & Abdul-Rahman, H. (2018a). Capabilities-based forecasting model for innovation development in small-and medium construction firms (SMCFS). Journal of Civil Engineering and Management, 24(3), 167–182. https://doi.org/10.3846/jcem.2018.1626

Wang, G., Xue, Y., Skibniewski, M., Song, J. L. & Lu, H. (2018b). Analysis of private investors conduct strategies by governments supervising public-private partnership projects in the new media era. Sustainability, 10(12), 4723. https://doi.org/10.3390/su10124723

Wang, Y., Ding, H., & Xiao, Y. (2014). Game analysis on rent-seeking behavior of three participants in overseas engineering project. In the 7th International Joint Conference on Computational Sciences and Optimization, Beijing, China. https://doi.org/10.1109/CSO.2014.24

Wen, S., Wu, G., & Miao, Y. (2014). Collusion between supervision unit and contractor in construction project based on evolutionary game theory. Open Cybernetics and Systemics Journal, 8(1), 877–883. https://doi.org/10.2174/1874110X01408010877

Wu, C. L., & Liu, C. C. (2013). An equilibrium analysis of the rent-seeking contests in infrastructure construction. In the International Conference on Mechatronics and Control Engineering, Guangzhou, China. https://doi.org/10.4028/www.scientific.net/AMM.278-280.2313

Wu, D. D., Xie, K., Hua, L., Shi, Z., & Olson, D. L. (2010). Modeling technological innovation risks of an entrepreneurial team using system dynamics: An agent-based perspective. Technological Forecasting and Social Change, 77(6), 857–869. https://doi.org/10.1016/j.techfore.2010.01.015

Xin, X. (2019). Research on safety regulation of chemical enterprise under third-party mechanism: An evolutionary approach. Symmetry, 11(8), 1057. https://doi.org/10.3390/sym11081057

Xu, S., Zhou, Z., & Liu, K. (2020). Multi-evolutionary game research on heavy metal pollution control in soil: Based on a third-party perspective. Sustainability, 12(13), 5306. https://doi.org/10.3390/su12135306

Xu, Y. L., & Zhao, C. G. (2009). Design of incentive mechanism and game analysis for project managers. In the IEEE 16th International Conference on Industrial Engineering and Engineering Management, Beijing, China. https://doi.org/10.1109/ICIEEM.2009.5344558

Yang, Z., Wang, Y., & Sun, C. (2018). Emerging information technology acceptance model for the development of smart construction system. Journal of Civil Engineering and Management, 24(6–8), 457–468. https://doi.org/10.3846/jcem.2018.5186

Yuan, H. (2017). Achieving sustainability in railway projects: major stakeholder concerns. Project Management Journal, 48(5), 115–132. https://doi.org/10.1177/875697281704800508

Zhang, H., Ji, X., & Wu, A. (2018). Analysis on the characteristics of ordinary and more serious accidents in building projects in China from 2005 to 2016. In the 3rd International Conference on Civil Engineering and Materials Science, Chengdu, China. https://doi.org/10.1051/matecconf/201820602012

Zhang, W., Zhu, S., Zhang, X., & Zhao, T. (2020). Identification of critical causes of construction accidents in China using a model based on system thinking and case analysis. Safety Science, 121(1), 606–618. https://doi.org/10.1016/j.ssci.2019.04.038

Zhao, Z. Y., Zuo, J., & Zillante, G. (2017). Transformation of water resource management: a case study of the South-to-North Water Diversion project. Journal of Cleaner Production, 163(10), 136–145. https://doi.org/10.1016/j.jclepro.2015.08.066