A game-theoretic approach to brownfield redevelopment: negotiation on cost and benefit allocation

Abstract

A game-theoretic approach to brownfield redevelopment is presented to support negotiations on related cost and benefit allocation. The process of brownfield redevelopment is discussed and three types of key decision makers (DMs) are identified, namely the landowner, the developer and the government. Based on a qualitative analysis of coalitions among the key DMs, a cooperative game model is formulated for the brownfield redevelopment cost and benefit allocation problem. To initiate the negotiation on the cost and benefit allocation, a common understanding of the estimates of relevant costs and benefits in a brownfield redevelopment project is required. The proposed modeling framework utilizes various nucleolus concepts and the Shapley value to find alternative fair cost and benefit allocations from which the DMs can make the final selection. An illustrative example is used to demonstrate the application of the proposed approach.