Abstract
This paper considers a repeated duopoly game of prefabrication contractors in mega infrastructure projects and assumes the contractors exhibit bounded rationality. Based on the theory of bifurcation of dynamical systems, a dynamic price competition model is constructed considering different competition strategies. Accordingly, the stability of the equilibrium point of the system is discussed considering different initial market capacities, and numerical simulation is performed. The results show the system has a unique equilibrium solution when initial capacity is high and the parameters meet certain conditions. The contractors’ price adjustment strategy has an important influence on system stability. However, an overly aggressive competition strategy is not conducive to system stability. Moreover, the system is sensitive to initial parameter values.
Highlights
The development of urbanization, technology, and economy, as well as the demand for convenience, have triggered enthusiasm worldwide towards building mega infrastructure projects, such as high-speed railways, the Hong Kong-Zhuhai-Macao Bridge in China, or the Land transport distance between New Lamu Port and Break-Even Point in Africa [1, 2]
We focus on the competition among mega project contractors and establish a price competition model considering the limited rationality of the contractor
In the construction of mega projects, some key components in certain areas are often supplied by a limited number of contractors with set production capacities, making it objectively easy to form an oligopoly situation, such as the manufacturing of steel structures for the Hong KongZhuhai-Macao Bridge in China
Summary
The development of urbanization, technology, and economy, as well as the demand for convenience, have triggered enthusiasm worldwide towards building mega infrastructure projects, such as high-speed railways, the Hong Kong-Zhuhai-Macao Bridge in China, or the Land transport distance between New Lamu Port and Break-Even Point in Africa [1, 2]. There are many mega projects under construction, and the prefabrication technology of key components is monopolized by a few companies, which makes it possible and meaningful to study the price competition of contractors. There are only two contractors for the prefabricated production of the steel box girder of the Hong Kong-Zhuhai-Macao Bridge: the China Railway Shanhaiguan Bridge Group Co., Ltd. and the Wuhan Heavy Engineering Co., Ltd. Due to the long-term nature of mega project construction, especially for developing countries, enterprise competition under monopolistic conditions will exist for a long time. The market scope of prefabrication production is relatively concentrated; due to the flow of human resources and technical cooperation between contractors, the spillover effect of knowledge is prone to occur.
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