Abstract
This paper generalises the Hawk-Dove evolutionary game by introducing cost sharing ratios for both players, and applies the generalised Hawk-Dove model to conflict management in projects through investigating the stability of Nash equilibria. A model with clashing interests between a project owner and a contractor is considered to derive their strategy adaptation given the cost sharing ratios. As expected, the pure Nash equilibria are shown to be dominantly stable while the mixed strategy equilibrium is observed to be unstable, across the range of considered cost sharing ratios. In addition, simulations are conducted on the strategy adaptation and stability of the equilibria under noisy and latent conditions. The obtained results can be used by project managers in optimising their strategy in practice.
Highlights
Project management emerged in the 1950s and expanded its applications in an increasing number of industries
This paper investigates the feasibility of utilising the evolutionary game theory in project management by setting up a representative model of a conflict between the owner and the contractor
It is confirmed that the mixed Nash equilibrium is an unstable saddle point as expected, and the introduction of α and β alters the dynamics on pure Nash equilibria, it does not challenge the dominance of these pure equilibria
Summary
Project management emerged in the 1950s and expanded its applications in an increasing number of industries. The participants’ behaviour is often tacit, requiring clarifications which may be obtained through rigorous modelling These challenges underlie possible conflicts and disputes, which may cause damage to the project owner and the contractor, and may directly impair the outcome of projects. Game theory may offer solutions to the problem by providing quantitative models of conflict and co-operation between intelligent, rational decision-makers [4]. This paper investigates the feasibility of utilising the evolutionary game theory in project management by setting up a representative model of a conflict between the owner and the contractor. Follow-up analysis is conducted by analysing the adaptation of optimal strategies and stability of the resultant equilibria under noisy and latent conditions which are typical in practical scenarios
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