A GAME-THEORETIC APPROACH TO COST ALLOCATION WITHIN PUBLIC WORKS SUPPLY CHAINS FOR SYSTEMS UTILIZING BLOCKCHAIN AND SMART CONTRACTS

Abstract

 The digital transformation of industries has recently impacted the construction industry, as stakeholders are beginning to consider the application of blockchain and smart contract technologies for construction supply chains. When installing such innovative technologies, the fair and economically rational allocation of development and operation costs of information systems is a fundamental challenge facing public works stakeholders. Without a reasonable understanding of the costs and advantages to be borne across the supply chain, consensus among stakeholders is infeasible. The purpose of this research is to analyze the cost allocation of development and operational cost for a construction management information system that utilizes blockchain and smart contract technology. Based on cooperative game theory, the Weighted Shapley Value and Priority-Ordering Nucleolus were applied to the supply chains of public works projects, and the fairness and economic rationality of arrangements were evaluated. The results show that cost allocation models based on the Weighted Shapley Value can represent an appropriate allocation method for public works stakeholders.