A Game-Theory Approach to Construction Dispute Resolution through Mediation

Game theory (GT) is a mathematical tool to help different parties involved in an interaction (i.e., game) predict the outcome of their actions. Complex interactional situations may arise as a result of dispute resolution cases. There are various types of alternative dispute resolution (ADR) approaches such as arbitration, conciliation, and mediation. Mediation is an informal way of solving conflicts or disagreements among two or more parties and involves of a neutral third party as the mediator who helps facilitate and settle the disagreement. Prisoner's dilemma and chicken game are the two GT models that are the focus of this research to be explored as a decision support tool in mediation. This study investigates how these models can be used to predict the conflict outcomes for all parties and their consequences on each party's interests in different scenarios where a mediator is involved. Two case studies on conflicts between different parties involved in construction projects are presented. In these case studies, the role of the moderator in resolving the conflict based on GT models is described. Results indicate that GT can be an extremely useful tool to help make decisions about the outcome of different actions in conflict resolution scenarios.