Mechanism Design on Incentives and Constraints for Construction Project Bidding

The economic relationship among the owners and the contractors of construction project is a kind of principal-agent relationship of strict economic meaning. After analyzing the principle-agent relationship formed in construction project bidding, which produce the problems and the reasons, the constraints conditions of design on the mechanism of construction project bidding are further analyzed, then, the incentive mechanism of construction project bidding are planned based on bid price and the type of contract selection. At the same time, the supervision and restriction mechanism of construction project bidding, such as the reputation mechanism is designed which encourage the economic objectives of the bidders to be close to the economic targets of the owners so that the probability of the risk of moral hazard and adverse selection are reduced. The system of construction market will gradually be promoted, the harmonious development of construction management will be achieved in the future.