No abstract

Reversal of bargaining power arising from asset specificity is important for the understanding of hold-up problems. Various types of asset specificity have been identified in different transaction contexts, but a previously unidentified or unnamed type is developed here: process specificity. Numerous widely used financial and contractual preventive measures in construction practice can be justified as responses to this problem of process specificity. These include bonds and retentions. However, these measures have limitations. Specifically, the client-led change orders cannot be completely averted and when they occur, the pricing of additional work largely relies on negotiation, implying that bargaining power determines the result. Consequently, the hold-up problem remains a managerial issue. To mitigate this problem, clients should choose a procurement system by aligning project attributes with the procurement system characteristics.Bargaining power, transaction cost, opportunism, asset specificity, procurement,

The multi-attribute utility approach (MAUA) provides a possibility of transforming subjective perception or evaluation into objective decision principles. However, as applied to procurement system selection, the advice derived from this approach can be problematical, if the nature of the procurement systems has not been examined carefully. The major weaknesses of the MAUA as applied in this field lie in its selection of priority variables and in some association of procurement routes with priority variables. This paper uses a transac2 tion cost perspective, in a setting of incomplete contracting, to develop these comments.Multi-ATTRIBUTE Utility Approach, Procurement Route, Incomplete Contracting, Transaction Costs,

Contents ix An alternative approach to the 'problem' of the large firm Unequal exchange Economies of scale and of integration Transaction costs and business strategy in construction Subcontracting in construction -causes and consequences Economics of joint ventures Economics of subcontracts Concluding remarks Capacity at the level of an industry or sector The neo-classical versus the 'constant unit direct cost' model of supply response to demand Unit labour costs over the business cycle Measuring spare capacity in the construction industry Imports and construction industry capacity Capacity and international construction Towards 'single European markets' for construction and for building materials? Concluding remarks 8 Capacity of the firm and the economics of the growth of firms Introduction The shape of the construction firm's cost curve The neo-classical rising short-run marginal cost curve The mirror-L-shaped unit cost curve Staff and capacity A Penrosian idea of capacity applied to a construction firm Concluding remarks

No abstract