As one of the most important sustainability project management practices, prefabrication\nhas been drawing increasing attention to project construction practitioners. However, due to the\nneeds of high technology and large capital investment, there is a great challenge for suppliers\nto adopt prefabrication in mega project construction. Therefore, designing an adequate incentive\nmechanism has become a daunting task for the project owner, which aims to ensure a socially\nand environmentally friendly project delivery. In this study, an incentive model with reputational\nconcerns from the perspective of the project owner was established and how this incentive affects\nsupplier�s effort and project owner�s profit was investigated. By contrasting to the incentive model\nwithout reputational concerns, when the reputation incentive is considered in the incentive contract,\nboth supplier�s effort and project owner�s profit increase. In addition, adding reputation incentive\nimplies more expenses, thus the project owner may not want to take this strategy due to the potential\nexpense increase. Therefore, the study also considered an incentive mechanism with constant total\nincentive intensity. By comparison, the result shows that this strategy is also useful which can\nimprove supplier�s effort and project owner�s profit.
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