Application of game theory to procurement management of large-scale construction project: A case in Sutong Bridge project

There are some 'conflicts among owners, contractors and suppliers who are the players in procurement. The conflicts can affect the project in many aspects, such as quality, time, and cost. Especially; in' the large-scale construction project, the procurement management is very complex due to the difficulty of management and the big scale of project. This paper deeply analyzes some problems of benefit conflicts in procurement process by using game theory, and gives the methods to reduce the conflicts and build cooperation among players. In the process of procurement, players always take optimal actions from the perspective 'of their own benefits, respectively. The opponents who are affected by a player's action will take corresponding countermeasures. This may incur losses for all players. In fact, this loss can be reduced. According to the cooperative game theory, conflicts will be naturally resolved if procurement players cooperate with each other and seek the maximum of the group benefit under the individual rationality constraint, and every player can get more benefits than before, achieving a 'win =win' state. The procurement players must create the forming conditions of coalition' together. In order to maintain the survival of the coalition, the players must negotiate to put forward an acceptable distribution plan of benefits. Based on the theory analysis,, this paper gives an example of Sutong Bridge procurement management to show some actual way. to form coalition, in order to illustrate the feasibility of- the theory. This paper also puts forward some suggestions building a coalition of procurement and some possible directions for future research in this field.