American Institute of Mathematical Sciences

Advanced
October  2015, 11(4): 1301-1319. doi: 10.3934/jimo.2015.11.1301

The interaction between BIM's promotion and interest game under information asymmetry

Jide Sun 1, and  Lili Wang 1,

1. 

No.1239, Siping Road, Yangpu District, Shanghai, 200092, China, China

Received  January 2014 Revised  September 2014 Published  March 2015

The application of Building Information Modeling can break the barrier between project owner and contractor. However, its application may cause an interest conflict between them. The conflict is focusing on the scramble for potential benefits brought by information asymmetry, and it may hinder the application of BIM in reverse. Focusing on information asymmetry, this research analyzed the interaction between BIM's promotion and project owner, contractor's interest game by combining Asymmetric Information theory and game theory. Based on the description of the interest conflict process, this research built a modified Principal-Agent model. By numerical analysis, it is proved that through BIM's effect of reducing information asymmetry in project, BIM's negative impact on contractor’s profit may let contractor refuse BIM's contract which will finally lead to the failure of BIM's promotion. Then, this research simulated the interest conflict by using the modified PA model. Through comparative analysis on the results, this research suggested: 1) project owners should choose BIM at proper stage but not the most advanced one, 2) contractor's effort cannot be ignored when promoting BIM, 3) variety of policies should be made in order to deal with specific problems when promoting BIM at different stages.
Keywords: asymmetrical information theory, gaming simulation., Building information modeling, interest conflict, Principal-Agent model.
Mathematics Subject Classification: Primary: 58F15, 58F17; Secondary: 53C3.
Citation: Jide Sun, Lili Wang. The interaction between BIM's promotion and interest game under information asymmetry. Journal of Industrial & Management Optimization, 2015, 11 (4) : 1301-1319. doi: 10.3934/jimo.2015.11.1301
References:
[1]

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[2]

R. Bergmann and G. Friedl, Controlling innovative projects with moral hazard and asymmetric information,, Research Policy, 37 (2008), 1504.  doi: 10.1016/j.respol.2008.05.004.  Google Scholar

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S. Bilal, Building information modeling framework: A research and delivery foundation for industry stakeholders,, Automation in Construction, 18 (2009), 357.   Google Scholar

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C. Chang, Principal-agent model of risk allocation in construction contracts and its critique,, Journal of Construction Engineering and Management, 140 (2014).  doi: 10.1061/(ASCE)CO.1943-7862.0000779.  Google Scholar

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T. S. Clark, A principal-agent theory of en banc review,, The Journal of Law, 25 (2009), 55.  doi: 10.1093/jleo/ewn008.  Google Scholar

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C. Eastman, P. Teicholz and R. Sacks, BIM handbook,, $2^{nd}$ edition, (2010).   Google Scholar

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F. Firoozi, D. R. Hollas, R. C. Rutherford and T. A. Thomson, Property assessments and information asymmetry in residential real estate,, The Journal of Real Estate Research, 3 (2006), 275.   Google Scholar

[9]

B. Hardin, BIM and Construction Management,, John Wiley & Sons, (2009).   Google Scholar

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Q. H. He, L. L. Qian, Y. F. Duan and Y. K. Li, Current situation and barriers of BIM implementation,, Journal of Engineering Management, 1 (2012), 12.   Google Scholar

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C. J. Henrik, Understanding adoption and use of bim as the creation of actor networks,, Automation in Construction, 1 (2010), 66.   Google Scholar

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M. C. Jensen and W. H. Meckling, Theory of the firm: Managerial behavior, agency cost and ownership structure,, Journal of Financial Economics, 3 (1976), 305.  doi: 10.1016/0304-405X(76)90026-X.  Google Scholar

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C. Kesera and M. Willingerb, Theories of behavior in principal-agent relationships with hidden action,, European Economic Review, 51 (2007), 1514.  doi: 10.1016/j.euroecorev.2006.10.007.  Google Scholar

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J. Liang and S. Q. Cai, Quantificational study on information asymmetry based on information cognition,, IEEE International Conference on Industrial Informatics, (2006), 405.  doi: 10.1109/INDIN.2006.275834.  Google Scholar

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C. M. Macal and M. J. North, Tutorial on agent-based modelling and simulation,, Journal of Simulation, 4 (2010), 151.  doi: 10.1109/WSC.2005.1574234.  Google Scholar

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[18]

J. Y. Pan and Y. Y. Zhao, Research on Barriers of BIM application in china's building industry,, Journal of Engineering Management, 1 (2011), 6.   Google Scholar

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M. C. Pontes, Agency theory: A framework for analyzing physician services,, Health Care Management Review, 20 (1995), 57.  doi: 10.1097/00004010-199523000-00010.  Google Scholar

[20]

A. Porwala and K. N. Hewage, Building information modeling (BIM) partnering framework for public construction projects,, Automation in Construction, 31 (2013), 204.  doi: 10.1016/j.autcon.2012.12.004.  Google Scholar

[21]

S. Rizal, Changing roles of the clients, architects and contractors through BIM,, Engineering, 2 (2011), 176.   Google Scholar

[22]

M. Schieg, Strategies for avoiding asymmetric information in construction project management,, Journal of Business Economics and Management, 9 (2008), 47.  doi: 10.3846/1611-1699.2008.9.47-51.  Google Scholar

[23]

R. Seunjiun, A. Zeeshan and P. Feniosky, An object-based 3D walk-through model for interior construction progress monitoring,, Automation in Construction, 20 (2011), 66.   Google Scholar

[24]

C. Sundaramurthy and M. Lewis, Control and collaboration: Paradoxes of governance,, Academy of Management Review, 28 (2003), 397.  doi: 10.2307/30040729.  Google Scholar

[25]

C. Tomo, Review and outlook for a 'building information model' (BIM): A Multi-standpoint framework for technological development,, Advanced Engineering Informatics, 25 (2011), 224.   Google Scholar

[26]

R. C. West, A factor-analytic approach to bank condition,, Journal of Banking & Finance, 9 (1985), 253.  doi: 10.1016/0378-4266(85)90021-4.  Google Scholar

[27]

J. Worsham and J. Gatrell, Multiple principals, multiple signals: A signaling approach to principal-agent relations,, The Policy Studies Journal, 33 (2005), 363.  doi: 10.1111/j.1541-0072.2005.00120.x.  Google Scholar

[28]

W. Wu, R. A. Raja and J. Y. Pan, The status of BIM application in china's AEC industry,, Journal of Building Information Modeling, (2010), 35.   Google Scholar

[29]

P. Xiang, J. Zhou, X. Y. Zhou and K. H. Ye, Construction project risk management based on the view of asymmetric information,, Journal of Construction Engineering and Management, 138 (2012), 1303.  doi: 10.1061/(ASCE)CO.1943-7862.0000548.  Google Scholar

[30]

J. X. Zhang, Study on barriers of implementing bim in engineering design industry in china,, Journal of Engineering Management, 4 (2010), 387.   Google Scholar

[31]

Z. Y. Zhang, On moral hazard of construction project visual organization,, Procedia Engineering, 12 (2011), 156.  doi: 10.1016/j.proeng.2011.05.025.  Google Scholar

show all references

References:
[1]

O. Al-Sobiei, D. Arditi and G. Polat, Managing owner's risk of contractor default,, Journal of Construction Engineering and Management, 131 (2005), 973.   Google Scholar

[2]

R. Bergmann and G. Friedl, Controlling innovative projects with moral hazard and asymmetric information,, Research Policy, 37 (2008), 1504.  doi: 10.1016/j.respol.2008.05.004.  Google Scholar

[3]

S. Bilal, Building information modeling framework: A research and delivery foundation for industry stakeholders,, Automation in Construction, 18 (2009), 357.   Google Scholar

[4]

R. Caers, C. D. Bois, M. Jegers, S. D. Gieter, C. Schepers and R. Pepermans, Principal-agent relationships on the stewardship -agency axis,, Nonprofit Management and Leadership, 17 (2006), 25.  doi: 10.1002/nml.129.  Google Scholar

[5]

C. Chang, Principal-agent model of risk allocation in construction contracts and its critique,, Journal of Construction Engineering and Management, 140 (2014).  doi: 10.1061/(ASCE)CO.1943-7862.0000779.  Google Scholar

[6]

T. S. Clark, A principal-agent theory of en banc review,, The Journal of Law, 25 (2009), 55.  doi: 10.1093/jleo/ewn008.  Google Scholar

[7]

C. Eastman, P. Teicholz and R. Sacks, BIM handbook,, $2^{nd}$ edition, (2010).   Google Scholar

[8]

F. Firoozi, D. R. Hollas, R. C. Rutherford and T. A. Thomson, Property assessments and information asymmetry in residential real estate,, The Journal of Real Estate Research, 3 (2006), 275.   Google Scholar

[9]

B. Hardin, BIM and Construction Management,, John Wiley & Sons, (2009).   Google Scholar

[10]

Q. H. He, L. L. Qian, Y. F. Duan and Y. K. Li, Current situation and barriers of BIM implementation,, Journal of Engineering Management, 1 (2012), 12.   Google Scholar

[11]

C. J. Henrik, Understanding adoption and use of bim as the creation of actor networks,, Automation in Construction, 1 (2010), 66.   Google Scholar

[12]

M. C. Jensen and W. H. Meckling, Theory of the firm: Managerial behavior, agency cost and ownership structure,, Journal of Financial Economics, 3 (1976), 305.  doi: 10.1016/0304-405X(76)90026-X.  Google Scholar

[13]

C. Kesera and M. Willingerb, Theories of behavior in principal-agent relationships with hidden action,, European Economic Review, 51 (2007), 1514.  doi: 10.1016/j.euroecorev.2006.10.007.  Google Scholar

[14]

A. Kianercy and A. Galstyan, Dynamics of Boltzmann Q learning in two-player two-action games,, Physical Review E, 85 (2012).  doi: 10.1103/PhysRevE.85.041145.  Google Scholar

[15]

J. Liang and S. Q. Cai, Quantificational study on information asymmetry based on information cognition,, IEEE International Conference on Industrial Informatics, (2006), 405.  doi: 10.1109/INDIN.2006.275834.  Google Scholar

[16]

C. M. Macal and M. J. North, Tutorial on agent-based modelling and simulation,, Journal of Simulation, 4 (2010), 151.  doi: 10.1109/WSC.2005.1574234.  Google Scholar

[17]

R. Müller and J. R. Turner, The impact of principal-agent relationship and contract type on communication between project owner and manager,, International Journal of Project Management, 23 (2005), 398.  doi: 10.1016/j.ijproman.2005.03.001.  Google Scholar

[18]

J. Y. Pan and Y. Y. Zhao, Research on Barriers of BIM application in china's building industry,, Journal of Engineering Management, 1 (2011), 6.   Google Scholar

[19]

M. C. Pontes, Agency theory: A framework for analyzing physician services,, Health Care Management Review, 20 (1995), 57.  doi: 10.1097/00004010-199523000-00010.  Google Scholar

[20]

A. Porwala and K. N. Hewage, Building information modeling (BIM) partnering framework for public construction projects,, Automation in Construction, 31 (2013), 204.  doi: 10.1016/j.autcon.2012.12.004.  Google Scholar

[21]

S. Rizal, Changing roles of the clients, architects and contractors through BIM,, Engineering, 2 (2011), 176.   Google Scholar

[22]

M. Schieg, Strategies for avoiding asymmetric information in construction project management,, Journal of Business Economics and Management, 9 (2008), 47.  doi: 10.3846/1611-1699.2008.9.47-51.  Google Scholar

[23]

R. Seunjiun, A. Zeeshan and P. Feniosky, An object-based 3D walk-through model for interior construction progress monitoring,, Automation in Construction, 20 (2011), 66.   Google Scholar

[24]

C. Sundaramurthy and M. Lewis, Control and collaboration: Paradoxes of governance,, Academy of Management Review, 28 (2003), 397.  doi: 10.2307/30040729.  Google Scholar

[25]

C. Tomo, Review and outlook for a 'building information model' (BIM): A Multi-standpoint framework for technological development,, Advanced Engineering Informatics, 25 (2011), 224.   Google Scholar

[26]

R. C. West, A factor-analytic approach to bank condition,, Journal of Banking & Finance, 9 (1985), 253.  doi: 10.1016/0378-4266(85)90021-4.  Google Scholar

[27]

J. Worsham and J. Gatrell, Multiple principals, multiple signals: A signaling approach to principal-agent relations,, The Policy Studies Journal, 33 (2005), 363.  doi: 10.1111/j.1541-0072.2005.00120.x.  Google Scholar

[28]

W. Wu, R. A. Raja and J. Y. Pan, The status of BIM application in china's AEC industry,, Journal of Building Information Modeling, (2010), 35.   Google Scholar

[29]

P. Xiang, J. Zhou, X. Y. Zhou and K. H. Ye, Construction project risk management based on the view of asymmetric information,, Journal of Construction Engineering and Management, 138 (2012), 1303.  doi: 10.1061/(ASCE)CO.1943-7862.0000548.  Google Scholar

[30]

J. X. Zhang, Study on barriers of implementing bim in engineering design industry in china,, Journal of Engineering Management, 4 (2010), 387.   Google Scholar

[31]

Z. Y. Zhang, On moral hazard of construction project visual organization,, Procedia Engineering, 12 (2011), 156.  doi: 10.1016/j.proeng.2011.05.025.  Google Scholar

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