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Concept and prototype of a web tool for public–private project contracting based on a system dynamics model

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  • Bo Hu
  • Armin Leopold
  • Stefan Pickl

Abstract

Contracting has a significant impact on the efficiency of acquisition processes, especially in the context of so-called public–private partnership (PPP) projects. Improperly drafted contracts may cause significant time and cost overruns in project execution due to opportunistic behaviour of private-sector suppliers. The main objective of our paper is to give a better understanding of opportunistic behaviour in PPP projects. The focus is on analysing the effects of delay penalties on the duration of such projects. We developed a system dynamics model, which depicts the complex relationship between the different aspects of a PPP project. In combination with this model, we present a web tool for conducting web-based experiments, which offers the possibility to track the decisions made by the private-sector suppliers during the progress of a simulated project. Using this web tool our experimental pilot study shows that carefully designed contracts help to keep the projects on schedule and bring benefits to both governmental entities and the private-sector suppliers. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Bo Hu & Armin Leopold & Stefan Pickl, 2015. "Concept and prototype of a web tool for public–private project contracting based on a system dynamics model," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(2), pages 407-419, June.
    • Handle: RePEc:spr:cejnor:v:23:y:2015:i:2:p:407-419
    DOI: 10.1007/s10100-014-0378-z
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    References listed on IDEAS

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    1. Kyle J. Mayer & Nicholas S. Argyres, 2004. "Learning to Contract: Evidence from the Personal Computer Industry," Organization Science, INFORMS, vol. 15(4), pages 394-410, August.
    2. Bernheim, B Douglas & Whinston, Michael D, 1998. "Incomplete Contracts and Strategic Ambiguity," American Economic Review, American Economic Association, vol. 88(4), pages 902-932, September.
    3. Yadong Luo, 2007. "An integrated anti-opportunism system in international exchange," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(6), pages 855-877, November.
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    Cited by:

    1. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.
    2. Jürgen Fleiß & Stefan Palan, 2015. "Collaborative decision systems in economics and in complex societal and environmental applications," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(2), pages 279-282, June.

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