IDEAS home Printed from https://ideas.repec.org/a/taf/conmgt/v32y2014i3p279-289.html
   My bibliography  Save this article

Collaborative incentive contracts: stimulating competitive behaviour without competition

Author

Listed:
  • Sa�d Boukendour
  • Will Hughes

Abstract

One of the major and recurring problems in designing cost incentive contracts is related to setting target cost and a risk-sharing ratio. With the standard sharing formula, contractors or alliance partners are incentivized to artificially inflate their target cost in order to maximize profit and minimize risk. Knowing that, owners attempt to pressure contractors by using various mechanisms, which are time-consuming and may jeopardize collaborative relationships afterwards. A fair risk-sharing formula is suggested that incentivizes the contractors or alliance partners to truthfully submit their target cost. The main tangible benefit is in removing suspicion and fostering trust and collaborative relationships between the contracting parties.

Suggested Citation

  • Sa�d Boukendour & Will Hughes, 2014. "Collaborative incentive contracts: stimulating competitive behaviour without competition," Construction Management and Economics, Taylor & Francis Journals, vol. 32(3), pages 279-289, March.
    • Handle: RePEc:taf:conmgt:v:32:y:2014:i:3:p:279-289
    DOI: 10.1080/01446193.2013.875215
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/01446193.2013.875215
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/01446193.2013.875215?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jean-Charles Fiolet & Carl Haas & Keith Hipel, 2016. "Risk-chasing behaviour in on-site construction decisions," Construction Management and Economics, Taylor & Francis Journals, vol. 34(12), pages 845-858, December.
    2. Derek Walker & Beverley Lloyd-Walker, 2016. "Understanding Collaboration in Integrated Forms of Project Delivery by Taking a Risk-Uncertainty Based Perspective," Administrative Sciences, MDPI, vol. 6(3), pages 1-17, August.
    3. Yongcheng Fu & Yongqiang Chen & Shuibo Zhang & Wenqian Wang, 2015. "Promoting cooperation in construction projects: an integrated approach of contractual incentive and trust," Construction Management and Economics, Taylor & Francis Journals, vol. 33(8), pages 653-670, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:conmgt:v:32:y:2014:i:3:p:279-289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RCME20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.