A Game Theoretic Framework for Subcontractors Partnering in Resource Management

Subcontractors have a significant role in the construction industry. Due to lack of systematic relationships and communication among different parties, involved in construction projects, including subcontractors, many beneficial opportunities may stay hidden and unknown during projects. In this study we discuss how subcontractors can benefit considerably from joint resource management in construction projects. We present a short-term partnering case in which subcontractors form an alliance, agree to put all or some of the common resources in a joint pool for a fixed duration of time and allocate the group resources using a more cost-effective plan. Cooperative game theory is applied to design a cooperative framework for fair and efficient allocation of the incremental benefits of cooperation among the subcontractors. First, a resource leveling model is used to build subcontractors´ characteristic functions for all possible coalitions formed by subcontractors. Then, various cooperative game theoretic solution methods are applied for allocation of cooperative gains among the subcontractors. Results show that considerable cost savings under the grand coalition creates strong incentive for cooperation.