Negotiation over Costs and Benefits in Brownfield Redevelopment

Abstract

A quantitative methodology is developed to support negotiations over the allocation of costs and benefits in brownfield redevelopment projects by utilizing cooperative game theory. In particular, guidelines for estimating the net benefits of various coalitions that can be formed by the landowners, developers and governments are presented. A general n-player cooperative game is formulated to model the negotiations. Two simple conditions are obtained for checking whether or not a three-player brownfield redevelopment negotiation game has a nonempty core. Various nucleolus concepts and the Shapley value are utilized to find alternative fair cost and benefit allocation schemes, from which the decision makers can negotiate. An illustrative example is employed to demonstrate how the proposed approach can be applied in practice.

Negotiation issues in forming public–private partnerships for brownfield redevelopment: Applying a game theoretical experiment

“…Liang et al, 2008;Mayer et al, 2005;Mu and Ma, 2007;Samsura et al, 2010;Wang et al, 2007). Other research has already demonstrated that game theory can provide insight in the negotiation strategies over specific issues relevant for BR (Arentze and Timmermans, 2003;Forester, 1987;Sounderpandian et al, 2005;Wang et al, 2011;Yousefi et al, 2010).…”

“…Regarding the application of game theory with respect to decision-making processes for BR, analyzing negotiations may be useful to decide how to allocate cost and benefits in brownfield redevelopment negotiations (Liang et al, 2008;Wang et al, 2007Wang et al, , 2011, to compare the costs and benefits of BR and greenfield development, in order to support BR with effective policies (Liang et al, 2008), and to evaluate the potential conflict in engaging public opinion in redevelopment processes (Tam and Thomas, 2011;Tam et al, 2009). Most applications, however, refer to improving decision-making processes in establishing various partnerships (Blokhuis et al, 2012;Sounderpandian et al, 2005;Walker et al, 2008;Wang et al, 2008;Yousefi et al, 2007Yousefi et al, , 2010.…”

Brownfield regeneration in Europe: Identifying stakeholder perceptions, concerns, attitudes and information needs

“…Moreover it has to be taken into consideration that, even though the regeneration of brownfield sites can offer immense development potentials including economic, social and environmental benefits (De Sousa, 2002;Lange and McNeil, 2004;Carrol and Eger III, 2006;Ganser and Williams, 2007;Chen and Khumpaisal, 2009;Strazzera et al, 2010;Syms, 2010;Schädler et al, 2011;Wang et al, 2011), still the exploitation of these benefits is hampered by uncertainties and information asymmetries Bartke, 2011;Schädler et al, 2012). Environmental contamination may not be clearly detected, stakeholders' attitudes on a redevelopment might not meet the municipalities' nor the investors' interests.…”

An Ordinal Game Theory Approach to the Analysis and Selection of Partners in Public–Private Partnership Projects

“…To the best of our knowledge, contributions within this analysis framework make use of the Cardinal game theory modelling framework to analyse various decisions in PPP projects. To be more specific, the various decisions in PPP projects that have been addressed so far include bidding price [11], bid compensation for projects with costly bid preparation [12]; concession period-also referred to as stipend or honorarium [13][14][15]; costs and benefits allocation [16], risk sharing and allocation [17]; resource pricing and allocation [18], resource value increment allocation [19], royalties and subsidies negotiation [20], negotiation of changes in output-based specifications [21] and claims, financial renegotiations, and opportunistic behaviour [22][23][24]. To be the best of our knowledge, so far the decision problem concerned with the selection of the private sector partners has not been addressed yet within a game theory framework, although-at least conceptually-game theory is the most suitable analysis and solution framework as, by design, it allows one to take account of both the public sector perspective and the public sector perspective, and hence, it provides a more realistic solution for implementation.…”