Regulative Measures Addressing Payment Problems in the Construction Industry: A Calculative Understanding of Their Potential Outcomes Based on Gametric Models

Abstract

Payment default is a common complaint from contractors in the construction industry. Many regulative measures have been adopted in different jurisdictions to address such payment problems. Current research primarily takes an interpretative approach for conducting semantic analysis of these measures, reporting their applications, and comparing their implementation outcomes. This paper presents a comprehensive theoretical understanding of these issues, their sources/roots, and related measurements, and addresses them through gametric models. Working elements of regulative measures are demarcated as punishment of opportunistic payers, remedies for unpaid payees, and costs to parties in referring to remedies and realizing justice. Empirical evidence from an international literature review of protection measures and experiences of addressing payment arrears and from a survey in mainland China is provided to support the models. This framework is useful to researchers and professionals in complementing the current descriptive approach in investigating and understanding regulative measures that address payment problems. This understanding is also useful for lawmakers to accompany the current path-dependent approach in introducing and amending payment protection legislation, i.e., referring to similar measures in other jurisdictions where a mutual legislative origin is shared.