Understanding of target value design for integrated project delivery with the context of game theory

Wooyong Jung, Glenn Ballard, Yong Woo Kim, Seung Heon Han

Research output: Chapter in Book/Report/Conference proceedingConference contribution

11 Citations (Scopus)

Abstract

Target value design (TVD) is a management method for integrated project delivery (IPD) through the collaborative efforts among different stakeholders. This study uses game theory to explain how TVD fundamentally enables each stakeholder to collaborate on initial design alignment. According to the prisoner's dilemma, two people locked in separate jail cells tend not to cooperate even if their cooperation could bring maximum benefits to both of them because each one suspects the possibility of being betrayed by the other. In a similar way, it is easily found that each stakeholder, such as an architect/engineer or a contractor, does not make the effort to collaborate aggressively in their early alignment. For example, they traditionally prefer point-based design to set-based design because the latter can merely amount to service for free. However, if a detective interrogates two prisoners together in the same space, two prisoners can cooperate, preventing them from betraying each other. Similarly, if an owner provides a medium for communication and strongly trusts the stakeholders with a contract or an incentive, they can find optimized solutions for maximizing their value while minimizing opportunism for their own benefit. With the context of game theory, this study compares the Design-Build delivery system with IPD based on TVD in light of collaborative design alignment. Based on this comparative application, this study shows how a set of managerial target costing strategies to shift from traditionally dominant behavior to cooperative management practice. This kind of economic approach is expected to be helpful for understanding the governance of cooperation among stakeholders for IPD.

Original languageEnglish
Title of host publicationConstruction Research Congress 2012
Subtitle of host publicationConstruction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress
Pages556-563
Number of pages8
DOIs
Publication statusPublished - 2012 Sep 19
EventConstruction Research Congress 2012: Construction Challenges in a Flat World - West Lafayette, IN, United States
Duration: 2012 May 212012 May 23

Publication series

NameConstruction Research Congress 2012: Construction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress

Other

OtherConstruction Research Congress 2012: Construction Challenges in a Flat World
CountryUnited States
CityWest Lafayette, IN
Period12/5/2112/5/23

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All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Building and Construction

Cite this

Jung, W., Ballard, G., Kim, Y. W., & Han, S. H. (2012). Understanding of target value design for integrated project delivery with the context of game theory. In Construction Research Congress 2012: Construction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress (pp. 556-563). (Construction Research Congress 2012: Construction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress). https://doi.org/10.1061/9780784412329.056