How to Describe the Characteristics of Construction Disputes: Transaction Cost Economics Perspective

It is broadly acknowledged that contracts play an important role in the architecture, engineering, and construction industry. It is also widely acknowledged that construction disputes are gradually becoming an epidemic. Facing the increased construction disputes, practictioners are struggling to find ways to equitably and economically resolve them. And much of the related research on disputes are discussed. According to Williamson's framework of Transaction Cost Economics (TCE), disputes in construction may be inevitable. Hence how to properly resolve these disputes is very important for all participants involved in construction projects. Under the framewoke of TCE, the 'transaction' is the basis of analysis and this feature makes TCE a very useful contact with many of the issues of central interest to applied microeconomics. Undoubtedly, the process of resolving dispute could be deem to be a transaction. Based on TCE theory, efficiency purposes that the transaction costs are cut down are served by matching governance structures to the characteristics of transactions in a discriminating way. This research aims at finding out the Construction Dispute Characteristics (CDCs) in line with asset specificity, uncertainty and frequency which are identified by Williamson as principal dimensions with respect to differing or various transactions. These characteristics are considered beneficial to the constrution industry, as they could provide construction professionals with a systematic approach in selecting the proper dispute resolution technique.