Formation Mechanism Based On Market Construction Project Cost

On New Classical Microeconomic Framework, based on Total Cost Management, according to the function that markets allocate resources efficiently, explore the efficient specialization and level of division of labor, discover efficient structure of economic organization and transaction institutions, etc, the purport of this thesis is put forward: expounding why the cost formation way of civil engineering project should be based on the market and exploring the market mechanism of the cost formation.This thesis firstly makes a comparative analysis of the differences between planning and market price mechanism, discovering the function and essence that markets allocate resources, and uncovering the operating contradiction of planning and its price theory, thereby revealing the objective laws that we develop a way to Socialist Market Economy. And after the above discussion, the mechanism of the cost formation of civil engineering project is firstly analyzed. Then, based on analyzing the standard biding model and discovering the formation principle of the cost formation of civil engineering project under developed market mechanism, by adding an endogenous variable R, which reflects the degree of marketlization of the management system in civil engineering project cost, this paper builds up a new general biding model. Under such a model, it makes further analyses and explanations on why the civil engineering cost management system under government control is inefficient and why such inefficient system is intensified. Therefore, this thesis makes a definite conclusion that the cost formation way of civil engineering project should be based on the market.Based on the above conclusion, according to the function that market can explore the efficient specialization and level of division of labour, and discover efficient structure of economic organization and transaction institutions, the paper expound how market select the investment subject and civil engineering cost management subject. Furthermore, based on the irreversibility of civil engineering project investment and its transaction institutions, the paper expounds the special course of cost formation in the proper order of the stages of the investment-early stage's decision, design, biding, construction and transference, etc, and makes a further essence that market select the efficient course of cost formation including the mechanism which exists in it. Therefore, on all sides this thesis specifically explores the mechanism of the cost formation of civil engineering project, which is based on the market.