Motivating Reliable Collaboration for Modular Construction: Shapley Value-Based Smart Contract

Gongfan Chen, Min Liu, Huaming Li, Simon M. Hsiang, Ashtad Jarvamard

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Establishing a fair benefit distribution system for construction projects, in which participants often need to work together in a highly uncertain and interrelated environment, is challenging. There is a lack of objective mechanism for construction projects to motivate reliable workflow automatically and instantly. The objective of this study is to develop Shapley value-based smart contracts to automatically assign fair rewards/penalties to motivate task-level collaborations. The research first developed a simulation model to quantify subcontractors' marginal contributions under different coalitional scenarios. Then, the simulation results were aggregated using Shapley value to determine each participant's reasonable rewards/penalties. Lastly, the payment was encoded in the smart contract and then deployed in the blockchain to self-enforce consensus executions. The results showed that Shapley value-based smart contracts exhibited incentives to motivate reliable contributions and enable peer negotiations to realize task-level production. The contributions of this study to the body of knowledge are (1) quantify subcontractors' marginal contributions to the project, and (2) determine how to distribute fair collaborative outcomes when project participants can perform at different levels of effort. The incentives embedded in smart contracts can reshape project participants' collaborative behaviors toward desired outcomes, enabling a self-manage, self-govern, and self-adjust decentralized autonomous organization.

Original languageEnglish (US)
Article number04023042
JournalJournal of Management in Engineering
Volume39
Issue number6
DOIs
StatePublished - Nov 1 2023

Keywords

  • Blockchain
  • Collaboration
  • Shapley value
  • Simulation
  • Smart contract

ASJC Scopus subject areas

  • Industrial relations
  • General Engineering
  • Strategy and Management
  • Management Science and Operations Research

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