Repeated game behavior between bidder and regulatory agency of construction engineering with intertemporal choice

¹ College of Economics and Management, Three Gorges University, Yichang, Hubei 443002, P.R. China
² Hubei Key Laboratory of Construction and Management in Hydropower Engineering, Three Gorges University, Yichang, P.R. China
³ College of Hydraulic and Environmental Engineering, Three Gorges University, Yichang, Hubei 443002, P.R. China
⁴ Guangxi Energy Co., LTD, Hezhou, Guangxi 542800, P.R. China

^* Corresponding author: 2954126074@qq.com

Received: 13 November 2022
Accepted: 13 November 2023

Abstract

The traditional theory of bidder and regulatory agency of construction engineering does not take into account the repeated periodicity of the game between the regulator and regulated party, so that the mathematical point of game equilibrium deviates from actual behavioral expression. According to the intertemporal nature of bidder and regulatory agency, this paper analyzed the payoff matrix of the subject of bidder and regulatory agency, constructed the repeated game behavior model of bidder and regulatory agency, and explored the game conditions of the behavioral expression (steady state and unsteady state) between the two game parties of construction engineering. The results shows that: (1) The administrative triggers are adopted in the normalized regulation, which could make both parties between bidder and regulatory agency reach Pareto Optimality; (2) The intertemporal choice behavior of the bidder is related to the economic punishments, extraneous benefits and legitimate benefits. The increase of economic punishments and legitimate benefits could reduce the illegal behaviors; (3) The larger the discounted function, the easier it is for the bidder to choose long-term legal behavior. Our work indicated that the key to establishing a long-term market mechanism between bidder and regulatory agency is to increase the future impact on the present, and construct the administrative trigger measures of infinitely repeated game.