Game Theory Analysis of ADR Used in Construction Industry

In the rapid development of Chinese construction industry, there are increasing disputes between project participants, due to the causes of poor quality, cost overrun, payments, etc. And many of them later become legal issues. The traditional legal settlement had showed great limitations for lengthy process and complexity. The industrial professionals strongly demand in introducing diversity resolution for the reason of efficiency. Alternative Dispute Resolution (ADR), which is considered to replace legal settlement, has been widely adopted in international environment for base of governance structure and function description. The aim of this paper is to explore the mechanism of ADR model by game theory. The primary conclusion shows that the ADR is neither a zero-sum game nor a positive-sum game but a positive-but-variable game structure. It will also provide strategies for each party in achieving fast dispute settlement