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.
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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:
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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.:
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