The mechanism of risk allocation is designed to protect all stakeholders,and it is vital to project success.Qualitative and quantitative ways of optimizing risk allocation have been well documented in extant literatur...The mechanism of risk allocation is designed to protect all stakeholders,and it is vital to project success.Qualitative and quantitative ways of optimizing risk allocation have been well documented in extant literature(e.g.,allocation principles,models,and solutions),and the foci of existing research are usually the maximization of rational utility.Few research has focused on partners’social preferences affecting the output of risk allocation.This study presents a quantitative approach based on modeling alliance member(AM)’s inequity aversion(IA)to analyze risk-sharing arrangements in an alliance project.Fehr and Schmidfs inequity-aversion model is integrated into modeling partner’s utility.This paper derives results for an alliance leader(AL)’s optimal risk-sharing ratio and AM's optimal risk-management effort simultaneously.The derivation is based on solving a restrained optimization problem using the conception and methods from Stackel-berg game theory.Results show that an AM’s IA significantly affects risk allocation between AL and AM.Specifically,envious preference is positively related to AL5s optimal risk-sharing ratio,whereas guilty preference negatively affects AL5s optimal risk-sharing ratio.These findings will be of interest to academics and practitioners involved in designing alliance negotiations.展开更多
基金This work was supported by the National Natural Science Foundation of China(Grant Nos.71921003,71701090,71571098,and 72071105)the Social Science Foundation of Jiangsu Province(Grant No.16JD009)the Fundamental Research Funds for the Central Universities(Grant No.14370120).
文摘The mechanism of risk allocation is designed to protect all stakeholders,and it is vital to project success.Qualitative and quantitative ways of optimizing risk allocation have been well documented in extant literature(e.g.,allocation principles,models,and solutions),and the foci of existing research are usually the maximization of rational utility.Few research has focused on partners’social preferences affecting the output of risk allocation.This study presents a quantitative approach based on modeling alliance member(AM)’s inequity aversion(IA)to analyze risk-sharing arrangements in an alliance project.Fehr and Schmidfs inequity-aversion model is integrated into modeling partner’s utility.This paper derives results for an alliance leader(AL)’s optimal risk-sharing ratio and AM's optimal risk-management effort simultaneously.The derivation is based on solving a restrained optimization problem using the conception and methods from Stackel-berg game theory.Results show that an AM’s IA significantly affects risk allocation between AL and AM.Specifically,envious preference is positively related to AL5s optimal risk-sharing ratio,whereas guilty preference negatively affects AL5s optimal risk-sharing ratio.These findings will be of interest to academics and practitioners involved in designing alliance negotiations.
