Study On Interest Coordination Mechanisms Of Multi-Subjects In Engineering Projects Incorporating Fairness Preference

Fairness preference has been widely applied in enterprise tournament incentive, team cooperation mechanism, regulation on manager’s salary in state owned enterprises and supply chain coordination of interests. Like these problems, the problem of interest coordination mechanisms of multi-subjects in engineering projects has the same principle-agent game relationship. Thus we study it incorporating fairness preference. As for the interest coordination of cross-border projects and multi-subjects projects, the cost sharing between governments and the incentive plan decided by the owner to motivate the contractors must incorporate fairness preference, which is part of behavioral contract theory.Specifically, this paper firstly introduces the existence of fairness preference and its calculating model. Then the paper establishes a game model between governments aimed at cross-border projects and gives out the best cost sharing strategy, which leads to a solution to the interest coordination problem. Finally, in order to maximize the utility of the owner and the contractors, also incorporating fairness preference, this paper establishes a game model between them by an incentive contract consisted of cost, time and quality.