A Game Theoretical Approach to Sharing Penalties and Rewards in Projects
AbstractThis paper analyzes situations in which a project consisting of several activities is not realized according to plan. If the project is expedited, a reward arises. Analogously, a penalty arises if the project is delayed. This paper considers the case of arbitrary monotonic reward and penalty functions on the total expedition and delay, respectively. Attention is focused on how to divide the total reward (penalty) among the activities: the core of a corresponding cooperative project game determines a set of stable allocations of the total reward (penalty). In the definition of project games, surplus (cost) sharing mechanisms are used to take into account the specific characteristics of the reward (penalty) function at hand. It turns outs that project games are related to bankruptcy and taxation games. This relation allows us to establish the nonemptiness of the core of project games.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2008-84.
Date of creation: 2008
Date of revision:
Contact details of provider:
Web page: http://center.uvt.nl
Project planning; delay; expedition; cost sharing mechanism; surplus sharing mechanism; bankruptcy problems; taxation problems; cooperative game; core;
Other versions of this item:
- Estévez-Fernández, Arantza, 2012. "A game theoretical approach to sharing penalties and rewards in projects," European Journal of Operational Research, Elsevier, vol. 216(3), pages 647-657.
- Arantza Est�vez-Fern�ndez, 2009. "A Game Theoretical Approach to Sharing Penalties and Rewards in Projects," Tinbergen Institute Discussion Papers 09-090/1, Tinbergen Institute.
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-31 (All new papers)
- NEP-GTH-2009-01-31 (Game Theory)
- NEP-PPM-2009-01-31 (Project, Program & Portfolio Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Estevez Fernandez, M.A. & Borm, P.E.M. & Hamers, H.J.M., 2007.
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-195640, Tilburg University.
- Koster, M.A.L., 1999. "Cost Sharing in Production Situations and Network Exploitation," Open Access publications from Tilburg University urn:nbn:nl:ui:12-80718, Tilburg University.
- Brânzei, R. & Ferrari, G. & Fragnelli, V. & Tijs, S.H., 2002.
"Two approaches to the problem of sharing delay costs in joint projects,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-91324, Tilburg University.
- Brânzei, R. & Ferrari, G. & Fragnelli, V. & Tijs, S.H., 2001. "Two Approaches to the Problem of Sharing Delay Costs in Joint Projects," Discussion Paper 2001-22, Tilburg University, Center for Economic Research.
- Borm, P.E.M. & Hamers, H.J.M. & Hendrickx, R.L.P., 2001.
"Operations Research Games: A Survey,"
2001-45, Tilburg University, Center for Economic Research.
- Peter Borm & Herbert Hamers & Ruud Hendrickx, 2001. "Operations research games: A survey," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 9(2), pages 139-199, December.
- Hartmann, Sönke & Briskorn, Dirk, 2010. "A survey of variants and extensions of the resource-constrained project scheduling problem," European Journal of Operational Research, Elsevier, vol. 207(1), pages 1-14, November.
- Rolf H. Möhring & Andreas S. Schulz & Frederik Stork & Marc Uetz, 2003. "Solving Project Scheduling Problems by Minimum Cut Computations," Management Science, INFORMS, vol. 49(3), pages 330-350, March.
- Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-76, July.
- Nalini Dayanand & Rema Padman, 2001. "Project Contracts and Payment Schedules: The Client's Problem," Management Science, INFORMS, vol. 47(12), pages 1654-1667, December.
- Weglarz, Jan & Józefowska, Joanna & Mika, Marek & Waligóra, Grzegorz, 2011. "Project scheduling with finite or infinite number of activity processing modes - A survey," European Journal of Operational Research, Elsevier, vol. 208(3), pages 177-205, February.
- Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
- Mohring, Rolf H. & Schulz, Andreas S. & Stork, Frederik & Uetz, Marc, 2003. "Solving project scheduling problems by minimum cut computations," Open Access publications from Maastricht University urn:nbn:nl:ui:27-4898, Maastricht University.
- Shenhar, Aaron J. & Dvir, Dov, 1996. "Toward a typological theory of project management," Research Policy, Elsevier, vol. 25(4), pages 607-632, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Broekman).
If references are entirely missing, you can add them using this form.