2020-04-10T06:36:58Z
http://oa.upm.es/cgi/oai2
oai:oa.upm.es:38895
2019-06-12T08:27:15Z
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Analysis of the Optimal Sharing of Construction Risk in Public Procurement Contracts
Sánchez Soliño, Antonio
Civil Engineering and Construction
Business
This paper discusses a model based on the agency theory to analyze the optimal transfer of construction risk in public works contracts. The base assumption is that of a contract between a principal (public authority) and an agent (firm), where the payment mechanism is linear and contains an incentive mechanism to enhance the effort of the agent to reduce construction costs. A theoretical model is proposed starting from a cost function with a random component and assuming that both the public authority and the firm are risk averse. The main outcome of the paper is that the optimal transfer of construction risk will be lower when the variance of errors in cost forecast, the risk aversion of the firm and the marginal cost of public funds are larger, while the optimal transfer of construction risk will grow when the variance of errors in cost monitoring and the risk aversion of the public authority are larger
E.T.S.I. Caminos, Canales y Puertos (UPM)
http://creativecommons.org/licenses/by-nc-nd/3.0/es/
2014-03
info:eu-repo/semantics/article
Article
Revista de la Construcción, ISSN 0717-7925, 2014-03, Vol. 13, No. 1
PeerReviewed
application/pdf
eng
http://revistadelaconstruccion.uc.cl/index.php/rdlc
info:eu-repo/semantics/openAccess
http://oa.upm.es/38895/