Contract Theory-Based Blockchain Reward and Penalty Mechanism for Construction Tendering Among Multiple Stakeholders

Abstract: With the prosperity of the Web 3.0 era, the construction sector is turning to blockchain-based tendering to address stakeholder conflicts. However, bid rigging among suppliers and information asymmetry between suppliers and the general contractor (GC) potentially undermine the GC utility. To this end, we introduce contract theory into the blockchain-based tendering framework to augment the utility of GC. Simulation results indicate a potential 20.7% profit increase for the GC, due to fostering competition among suppliers, such as material delivery time, compared to traditional blockchain-enabled bidding processes.