Narrow Results

Unlicensed moneylending is when an unlicensed individual, often called loan shark, lends money to another individual. We model the unlicensed moneylending market to analyze relational contracting between borrowers and guarantors. A guarantor repeatedly decides whether to act as the guarantor for a borrower, whereas the borrower repeatedly chooses a loan shark to borrow from and determines his effort in repaying loans. We show that the borrower starts by trying different loan sharks to learn about their forcefulness in collecting repayments and eventually only trades with those who are less forceful. Inefficient suspension or termination of relationship is necessary to discipline the borrower’s behavior when the parties are still uncertain about the loan sharks’ forcefulness, but can be avoided when the uncertainty is resolved. We also show in extensions that the borrower may increase his efforts over time as the relationship becomes more valuable to him, while the guarantor can resort to direct monitoring of the borrower’s effort as a substitute for the suspension or termination of relationship.

Divergent goals, short-term objectives and fragmented approaches have weakened construction supply chains and thereby adversely affected their outputs and performance levels. Furthermore, relationships and satisfaction levels have also deteriorated due to these "disjointed' groupings and segregated functions. Construction clients and their contractors often appear to be polarized in some form of "opportunism" driven "adversarial" relationships, while other supply chain members seem to be "pulling" in different directions as well. In order to overcome these problems, a series of synergistic findings from research initiatives and knowledge "mining" in related topics are consolidated in this paper, so as to identify approaches for re-integrating construction supply chains. An analogy of achieving an appropriate "operational" equilibrium in construction supply chains is formulated, based on a careful identification of various sets of generic impacting "forces." This is linked to an amalgamation of identified best practices, an appreciation of "cultural" influences, and emerging relational contracting approaches. Distilling and synergizing useful relevant "knowledge" on the above from recent research exercises and related literature, a framework for relational integration of construction supply chains is conceptualized and presented in this paper.

A major contributing factor to the inefficiency in the construction industry is the adversarial relationships that exist within the industry. The strategic importance of relationship style contracting is hence getting recognized. Both public and private sector clients are stipulating more integrated and collaborative forms of procurement. The avoidance of traditional business-as-usual thinking and effective participation in relationship development have the potential to significantly enhance project outcomes. This chapter is limited to non-contractual agreement and behaviours, which are not defined in the contractual documents. Because contracting parties can practice to a different extent according to their will, non-contractual agreements and behaviours can better demonstrate the shared perceptions regarding practices that affect relationships in construction projects. This chapter adopts the concept of psychological contract (PC), which is defined as “individual beliefs in reciprocal obligations between employees and employers” and, refers to unwritten agreements and behaviours between a construction firm and its upstream or downstream procurement partners. This paper aims to investigate the impacts of contracting parties’ relationships arising from PC in two distinct procurement systems, including the upgrading project of Beijing Subway Lines 1 and 2 and the improvement project of Fuk Man Road Nullah in Sai Kung, Hong Kong. The Beijing project was procured traditionally while the Hong Kong project adopted the Engineering and Construction Contract (ECC) Option C of New Engineering Contract (i.e. a collaborative contracting approach). Regardless of the procurement methods, findings suggest PCs are present in construction delivery teams.