Research on Extreme Dispute Decisions of Large-Scale Engineering Projects from the Perspective of Multidimensional Preferences

Ren Tan and Kairong Hong
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Ren Tan: Business School, Central South University, Changsha 410083, China
Kairong Hong: Business School, Central South University, Changsha 410083, China

Mathematics, 2021, vol. 9, issue 22, 1-24

Abstract: The main purpose of this paper is to study the influence of game players’ behavior preferences on the strategy choice and equilibrium results in the game process of large-scale engineering projects’ extreme disputes. In contrast to the self-interested preference and completely rational assumptions of traditional economics, this paper focuses on the discussion of loss aversion preference and fairness preference against the background of incomplete information about the game subject. Considering the influence of the decision-makers’ multidimensional preferences, this paper establishes a three-party game model for the government, the project construction units, and the public. Furthermore, the equilibrium results of four different types of extreme disputes are deduced using the game method. We deduce the evolutionary paths and equilibrium characteristics and discuss them in combination with actual cases in China in an attempt to provide theoretical support and scientific analysis tools to avoid serious disputes and conflict decision results. Through research, this paper finds that the transformation of prior beliefs, the role of multidimensional preference sets, and a lack of information between the game players in the game process are key to the evolution of project disputes into extreme dispute decisions.

Keywords: extreme dispute; multidimensional preference set; fairness preference; loss aversion preference; project decision-making (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
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