An Incentive Scheme in GMP Contracts Using a Game Theory Approach

Abstract

AbstractThe paper investigates the conventional guaranteed maximum price (GMP) contract’s ability to align the contractor’s behavior with the project owner’s objectives. Our findings reveal that the default form of the GMP contract fails to sufficiently ...Practical ApplicationsIn this paper, an incentive scheme is developed within the guaranteed maximum price framework. This scheme is designed to align the contractor’s profit-maximizing behavior with the owner’s goals, motivating the contractor to use ...