Project: Dynamic Contracting

About the project

Tendering is the main method in the public sector for attracting contractors to execute infrastructural projects, such as road construction.

The problem is that such tenders result in long-term contracts, while circumstances may change during the building process, leading to new risks and opportunities for both parties.

Also, contracts may be based on lacking or false information. A method for creating more dynamic contracts is thus called for, allowing for renegotiation of details during execution of the project.

Dynamic Contracting in Infrastructures claimed to find a better way for setting up rules for tendering.

Among others, the project looked for a way to give contractors incentives to provide more information beforehand, and to support contractors and managers in dealing with changes.

Furthermore, contractors are challenged to take into account so-called “social costs”: the costs of serious traffic queues due to maintenance activities.

Our contribution

From the beginning, Almende has focused on multi-agent modeling for Dynamic Contracting. Both mechanism design and game theory have been used to attempt optimization in problems where agents are self-interested and (partial) information is only privately known to each agent.

Results

The project has resulted in in the serious game, constructed for the maintenance process. Another outcome of the project interesting to Almende consists of techniques for agent-based traffic simulation. An application of these techniques is foreseen in the Deal platform of daughter company Deal Services.

Partners

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