Arabian Journal for Science and Engineering (2021) 46:1925–1940

https://doi.org/10.1007/s13369-020-05261-4

RESEARCH ARTICLE-SYSTEMS ENGINEERING

Analysis on the Procurement Cost of Construction Supply Chain based

on Evolutionary Game Theory
Zhuoran Tao1 · Bo Wang1 · Lingli Shu1

Received: 3 June 2020 / Accepted: 17 December 2020 / Published online: 6 January 2021
© King Fahd University of Petroleum & Minerals 2021

Abstract
The selection of building materials plays an important role in the control of engineering projects. The subject of this paper
is to study the problem of balancing the relationship between the general contractor and building material suppliers in the
construction supply chain. Firstly, to solve the problem, this paper from the perspective of material quality safety analyzes
the problems between material suppliers and construction general contractor. Then, under the constraints of information
asymmetry and bounded rationality, the evolutionary game model of material suppliers and construction contractors is
constructed to study the strategy selection in the process of product quality supervision. Finally, the system simulation is
carried out by using MATLAB software to demonstrate the evolutionary equilibrium strategy of the model when different
parameters change. The results show that the strategy selection of material suppliers and construction contractors is affected
by multiple factors such as supervision cost, material cost, risk probability of accident occurrence and penalty amount.

Keywords  Evolutionary game · Strategy · Construction supply chain · Procurement cost · selection · Quality supervision

1 Introduction enterprises will be damaged. At the same time, it will also

In recent years, the issue of construction and housing has
been receiving great attentions. Whether it is the fluctuation
of housing prices, the geographical location of the place of
residence, or the news of hidden dangers related to business
accidents, it will become a topic after dinner. So how to
choose and control the building materials by enterprises is
very important [1].
In fact, there are many factors that affect the occurrence
of construction accidents. Such as the construction materi-
als are not qualified, and the construction technology is not
qualified. In addition, we should also consider the impact
of uncertainties. For example, force majeure (natural dis-
asters and climate disasters) may also lead to the collapse
of construction buildings. At the same time, whether the
regulation is standardized is also a problem we should pay
attention to. Whether the staff involved in quality inspection
have the risk of moral problems due to bribery. We all know
that once these accidents occur, the rights and interests of all
* Bo Wang
Wangbo1@usst.edu.cn
1
Business School, University of Shanghai for Science
and Technology, Shanghai 200093, China
have a great negative impact on social stability. However,
even if there are relevant laws and regulations restricting
the safety production management of building materials,
there will still be some suppliers and general contractors to
maximize their own interests and take the wrong approach,
resulting in construction accidents. Therefore, how to bal-
ance the cooperation between suppliers and contractors has
become our current research topic [2–4].
Game theory originated from John von Neumann, who
proved the basis of game theory in 1928. Until 1944, John
Von Neumann and Oskar Morgenstern published their
book Theory of Game and Economic Behavior [5, 6]. They
extended the two-player game to the structure of a multi-
player game and applied the game theory system to the field
of economics. This theory laid the foundation for future
research [7]. Evolutionary game theory combines tradi-
tional game theory with biology, no longer regards human
as a completely rational game party, and considers human
to be limited rational. People with limited rationality will
learn new knowledge through continuous learning during
the game, and use the new knowledge to adjust and improve
their learning strategies, so as to find better learning strate-
gies [8]. The early research of evolutionary game theory
originated from Fisher’s game analysis of the conflict and

13
Vol.:(0123456789)

1926
cooperative behavior between animals and plants in the
field of biology [9]. He found that the evolution of animals
and plants can be explained by game theory in most cases,
without relying on any rational assumptions. In the field of
economics, evolutionary game theory can be traced back to
Cournot’s research on the process of output adjustment in
duopoly market competition [10–12]. Based on this research,
later Nash’s "group behavior interpretation" is considered
to be the earliest achievement of evolutionary game theory
[13–15]. He believed that there is no need to assume that
participants have sufficient knowledge of the entire game
structure; nor that participants need to have the desire and
ability to perform any complex reasoning; only that par-
ticipants can accumulate information about the comparative
advantages of using various pure strategies. However, this
Nash equilibrium can be achieved [16, 17]. When Smith
et al. [18] first proposed the concept of evolutionarily sta-
ble strategies in their creative paper, it marked the official
birth of evolutionary game theory. In the same year, Taylor
et al. [19] first proposed the basic concept of replication
dynamics in evolutionary game theory, which is undoubt-
edly a major breakthrough in the study of evolutionary
game theory. Evolutionary stability strategy and replication
dynamics are two core concepts of evolutionary game theory
[20]. The relation between them shows that the evolution-
ary stability strategy is the equilibrium point of the replica-
tion dynamic equation and represents the stable state of the
evolutionary game. Replication dynamics is the dynamic
convergence process under this stable state. All these studies
show that evolutionary game theory has become an impor-
tant analytical tool of evolutionary economics [21, 22]. By
reading relevant literature, we find that game theory can be
divided into two categories: complete information game [23,
24] and incomplete information game [25, 26]. They can be
divided into dynamic game and static game. Dynamic game
with complete information means that the information in the
game is complete, that is, both sides have a complete under-
standing of the strategic space and payment function of the
participants under the strategic combination, but the behav-
ior is continuous. In the complete static game, players can
make complete decisions when they fully understand and
master various strategies. Incomplete information dynamic
game means that the behavior of participants is continu-
ous, and the latter can observe the behavior chosen by the
former; each participant has no accurate understanding of
the characteristics, strategy space and payment function of
other participants. Static game with incomplete informa-
tion means that each player cannot accurately understand
the characteristics, strategy space and revenue function of
other players. At least one player does not fully understand
the characteristics of another player, that is, he does not
know the true type of a player, but he knows the probability
of each type. This paper is based on the evolutionary game
13
Arabian Journal for Science and Engineering (2021) 46:1925–1940
under incomplete information to analyze the procurement
stage of construction supply chain.
Nowadays, many scholars apply game knowledge to sup-
ply chain management. The traditional supply chain manage-
ment [27, 28] refers to the coordination of internal and exter-
nal resources to jointly meet the needs of consumers, and
then to optimize the operation of the supply chain [29–31].
The enterprise expects to make all processes of supply chain
be operated efficiently with the minimum cost, including
workflow, physical flow, capital flow and information flow,
etc., from the material procurement to the final customer.
Finally, the good products will be delivered to consumers
timely and accurately at a reasonable price [32–34]. Some
scholars also apply the knowledge of game theory to the sup-
ply chain management of manufacturing industry. It mainly
controls the costs in the procurement [35], logistics [36]
and transportation [37] stages of the supply chain in order
to maximize the profit of the enterprise. Jukka et al. [38]
studied the impact of sustainable procurement on risk man-
agement performance and procurement performance. They
found that the adoption of sustainable procurement methods
can improve the procurement performance of enterprises
[39]. In fact, the level of procurement performance plays an
important role in supply chain cost control [40]. Shu et al.
[41] studied the optimization of logistics service quality
based on pricing in supply chain management. They found
that a single cost-sharing contract could not coordinate a
supply chain when it included both a manufacturer and an
online retailer. But when it adds a revenue-sharing contract,
the supply chain coordinates [42, 43]. Therefore, retailers
should share both logistics costs and benefits with manufac-
turers. When both parties are willing to accept revenue-shar-
ing [44] and cost-sharing [45] contracts, both parties’ profits
and overall profits can be increased. Maher et al. [46] took
game theory as the focus of coordinating supply chain man-
agement, and they believed that evolutionary game knowl-
edge was an important methodological tool for analyzing
green supply chain management. Sun et al. [47] combined
the evolutionary game knowledge with green supply chain
management. Under the government subsidy mechanism,
they established the evolutionary game model between the
supplier group and the manufacturer group, and expounded
the influence of green investment and government subsidy
on the model. In fact, considering the responsibilities of the
government departments, he will supervise the general con-
struction contractor. Therefore, in this paper, we establish a
reward and punishment mechanism for construction contrac-
tors through the regulatory role of the government.
Compared with previous studies, the main contributions
of this paper are as follows.
Firstly, this paper studies the cost analysis in the pro-
curement phase of the construction supply chain. So far, the
procurement stage has always been a particularly important
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1927
stage in supply chain management. Procurement cost will
play a key role in the improvement of enterprises’ economic
benefits and market competitiveness. Some scholars used
the classification method of procurement materials, ASME
process analysis method [48–50], supplier selection, evalu-
ation and other methods to find out the factors and problems
affecting the procurement cost management of enterprises
and to control them. Our main work is to introduce the idea
of game theory into the construction supply chain and to
analysis the procurement phase cost of construction projects.
Secondly, as far as we know, some scholars have used
classical game theory to analyze construction projects. Clas-
sical games assume that players are completely rational. But
the reality is that, due to various reasons, the game subject
can’t reach the state of complete rationality. The idea of evo-
lutionary game theory is that the game subject is bounded
rationality. It combines the classical game theory with the
dynamic evolution thought, and effectively makes up for the
deficiency of the classical game theory on the static model
and absolute rationality of the game subject. At the same
time, we can gradually find the best strategy in the game
until it reaches a certain stable state. Therefore, we believe
that the evolutionary game theory can be used to describe
the procurement phase of construction supply chain more
effectively.
Thirdly, we apply evolutionary game theory to the pro-
curement stage of construction supply chain under the gen-
eral contracting mode. Whether it is necessary to supervise
the quality and safety of materials is questioned. And how to
balance the cooperation between the general contractor and
material suppliers is our research topic. Due to the complex-
ity of external factors, we consider the risk that accidents
caused by force majeure (natural disasters and climate dis-
asters) will cause losses to the construction, and the risk
of the quality inspection personnel engaged in supervision
may have moral problems due to bribery. This paper stud-
ies and analyzes the influence of different factors on the
profitability of material suppliers and construction contrac-
tors, and the strategies that they prefer to maximize their
interests. Through understanding, we find that in the game
theory research, most scholars merely study the impact of
different costs on their strategic choice, while the research
on the addition of external factors in strategic choice is rela-
tive less. In general, the cost and benefit of different materi-
als provided by material suppliers are different. In order to
maximize their own interests, the general contractor makes
different choices according to the corresponding supervi-
sion cost required by the supervision. However, considering
the possibility of accidents caused by uncertain factors, the
strategy choice of both sides will be changed. Therefore, we
use MATLAB simulation to demonstrate the evolutionary
equilibrium strategy of the model when different parameters
change. The results show that the supervision cost, material
cost, the probability of accidents under the condition of
force majeure and the amount of punishment will affect the
player’s strategy choice. In order to maximize their own
interests, players often weigh different factors to control and
choose the most favorable strategy for themselves.
We organize the remainder of this paper as follows. In
section 2, we give a brief description of the problem. In
section 3, the related mathematical models are constructed
by us. And in section 4, we give the corresponding risk prob-
ability value, cost and penalty index for the mathematical
model obtained in the previous section, and then obtain the
stable state of the two sides of the game and the evolution
game trend of the two sides through numerical analysis.
Finally, in section 5, we give the research results and rel-
evant suggestions on this topic.
2 Problem Description
Based on evolutionary game theory, this paper takes the pro-
curement stage of construction supply chain as the research
object. In the context of a duopoly competition between
building material suppliers and general contractors. And
through the tripartite structure formed by government func-
tional departments, construction contractors and construc-
tion material suppliers as the background to support our
research topic, as shown in Fig. 1. We study all decisions
made by game players for their own benefit. The general
contractor can choose whether to supervise the quality of
the materials provided by the construction material supplier,
and the material supplier can choose whether to provide the
quality of the construction material with guaranteed qual-
ity. And different choices bring them different benefits. This
article mainly discusses the realization conditions of the two
choices under steady state. In order to simplify and clearly
describe the problem, the relevant symbols and meanings
are given in Tables 1.
In addition, this article makes the following assumptions:
Hypothesis 1  Players are rational, which is the basic
assumption of game theory. Rationality refers to that par-
ticipants try to use their reasoning ability to maximize their
own interests. Therefore, we assume that the suppliers of
building materials and the general contractor of construction
are the subject of bounded rationality, without rent-seeking
and collusion with each other.
Hypothesis 2  The construction material supplier’s strategy
set is for { quality assurance, quality speculation}; probabili-
ties are x and 1 − x . The construction general contractor’s
regulatory strategy is set to be {regulated, unregulated};
probabilities are y and 1 − y . And x , y ∈ [0, 1].
13

1928 Arabian Journal for Science and Engineering (2021) 46:1925–1940

Fig. 1  The main body of each stage of the construction supply chain

Table 1  Notations Notations Definitions

x Probability of quality assurance of construction material suppliers

y Probability of quality supervision of construction general contracting
CR1 Construction material cost with guaranteed quality
CR2 Cost of inferior construction materials
WR Procurement cost to be paid by general construction contractor to material suppliers
CK Supervision cost of general construction contractor
WK Standardized supervision is rewarded by government functional departments
FR1 Rework cost of material supplier
FR2 Penalty limit
M The material supplier bribes the quality inspection personnel
𝛼 Risk probability of moral problems in quality inspection personnel
𝛽 Probability of accidents caused by force majeure
ER1 The excepted benefits from quality assurance of construction material suppliers
ER2 The expected benefits from quality speculation by construction material suppliers
ER The total expected benefits for construction material suppliers
EN1 The gains from the supervision of the construction general contracting choice
EN2 The gains from the non-regulation of the construction general contracting option
EN The total proceeds from the construction of the general contractor

Hypothesis 3  The cost of construction materials provided
by the construction material supplier with guaranteed qual-
ity is CR1 . The cost of construction materials that cannot be
guaranteed is CR2 . Because the difference of raw materials
will lead to different costs, so CR1 > CR2 . The cost paid by
the General Contractor to the material supplier shall be WR.
Hypothesis 4  When the general construction contractor
chooses to supervise the material suppliers, the supervision
cost is CK  . The supervision was rewarded by the government
functional departments as WK  . If the general construction
contractor does not supervise the material suppliers, he does
not have to pay the supervision fee. When the general con-
struction contractor performs supervision duties and finds
that the materials supplied by the supplier have quality prob-
lems, the construction materials will be returned, and the
material supplier’s loss is FR1 and the loss suffered by the

13
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1929

( ) ( )
supplier of construction materials is greater than the cost ER2 = y WR − CR2 − FR1 − 𝛼M + (1 − y) WR − CR2 − 𝛽FR2
of supplying materials with guaranteed quality, FR > CR1. = WR − CR2 − 𝛼yM − yFR1 − 𝛽FR2 + 𝛽yFR2
(2)
Hypothesis 5  Considering that the quality inspection person-
The total expected benefit of the construction material
nel may have the risk of moral problems 𝛼(0 ≤ 𝛼 ≤ 1)[51,
supplier is ER .
52], that is, the quality inspection personnel may take bribes
( )
M in order to maximize their own interests, thus ignoring the ER = xER1 + (1 − x)ER2 = x WR − CR1
economic benefits of the general contractor and the interests ( )
+ (1 − x) WR − CR2 − 𝛼yM − yFR1 − 𝛽FR2 + 𝛽yFR2
of customers. At the same time, due to force majeure (natural
disasters, climate disasters, etc.) 𝛽(0 ≤ 𝛽 ≤ 1) [53], the rel- = −xCR1 + WR − CR2 − 𝛼yM − yFR1 − 𝛽FR2 + 𝛽yFR2

evant departments will be investigated by government depart- + xCR2 + x𝛼yM + xyFR1 + x𝛽FR2 − x𝛽yFR2 (3)
ments. If it is finally found out that the accident is caused by
According to the stability principle of differential equa-
material suppliers’ opportunistic supply of inferior materials
tion, the replicated dynamic equations are available when
due to improper supervision of the general contractor of con-
the construction material supplier selects the raw materials
struction, it will be subject to the administrative accountabil-
that provide quality assurance:
ity of law enforcement personnel by the government due to
( )
poor supervision. The penalty received by the general con- dx
F(x, y) = = x ER1 − ER
struction contractor and material suppliers FR2. dt
( )
= x(1 − x) CR2 − CR1 + yFR1 + 𝛽FR2 − 𝛽yFR2 + 𝛼yM (4)
3 Model Building and Analysis Similarly, the income expectation from the selection of
supervision of construction general contracting is EN1.
Based on the above assumptions and analysis, we build a ( )
game income matrix between the construction general con- Ek1 = x WK − WR − CK
( )
tractor and the construction material supplier (Tables 2, 3) + (1 − x) WK − WR − CK = WK − WR − CK (5)
Based on the game relationships listed, we set up as the
expected benefit of quality assurance for construction mate- The income expectation from construction general con-
rial suppliers is ER1. tracting options when they are not regulated is EN2.
( ) ( ) ( ) ( )
ER1 = y WR − CR1 + (1 − y) WR − CR1 = WR − CR1 (1) EK2 = x −WR + (1 − x) −WR − 𝛽FR2 = −WR − 𝛽FR2 + x𝛽FR2
(6)
The expected benefit from quality speculation by con-
The general revenue expectation for construction general
struction material suppliers is ER2.
contractors is EN .
( ) ( )
EK = yEK1 + (1 − y)EK2 = y WK − WR − CK + (1 − y) −WR − 𝛽FR2 + x𝛽FR2
(7)
= yWK − WR − yCK − 𝛽FR2 + x𝛽FR2 + 𝛽yFR2 − xy𝛽FR2

Table 2  Game Revenue of Construction general Contractor

Construction Material Supplier
Supervise ( y) Non regulation
( 1 − y)

Construction material Supplier Quality assurance(x) WR − CR1 WR − CR1.

Quality speculation(1 − x) WR − CR2 − FR1 − 𝛼M WR − CR2 − 𝛽FR2

Table 3  Game Income from Construction general contractor

General Construction Contract
Supervise ( y) Non regulation
( 1 − y)

Construction material Quality assurance(x) WK − WR − CK −WR

supplier Quality speculation(1 − x) WK − WR − CK −WR − 𝛽FR2

13

1930 Arabian Journal for Science and Engineering (2021) 46:1925–1940

� � � �
According to the stability principle of differential equa- ⎡ dx dx
⎤ �
𝜕 𝜕 �
tion, the copy dynamic equation when the construction gen-
dt dt
⎢ ⎥ A11 A12
eral contractor chooses to supervise the supplier is available:
J=⎢
𝜕
�𝜕x �
dy
𝜕
�𝜕y �
dy ⎥= A A (15)
⎢ dt dt ⎥ 21 22
( ) ( )
⎣ 𝜕x 𝜕y ⎦
dy
Hx, y = = y EN1 − EN = y(1 − y) WK − CK + 𝛽FR2 − x𝛽FR2
dt According to the theorem, if the following two conditions
(8)
are satisfied at the same time, the equilibrium point of rep-
Order F(x, y) = 0 and H(x, y) =( 0 , respectively.
) Balance lication dynamic equation is evolutionary stability strategy
(0, 0),(0, 1), (1, 0) (1, 1) points and x0 , y0 . (ESS) [55].
Among them:
(a) trJ = A11 + A22 < 0 (16)
W − CK + 𝛽FR2
x0 = K (9)
𝛽FR2 [ ]
A11 A12
(b) det J =
A21 A22
= A11 A22 − A12 A21 > 0 (17)
C − CR1 + 𝛽FR2
y0 = R2 (10)
𝛽FR2 − 𝛼M − FR1 Therefore, at five local equilibrium points, the specific
value of A11 , A12, A21, A22 is shown in Table 4.( )
According to the evolutionary game theory, we know Obviously, at the local equilibrium point x0 , y0  , there
that to analyze the evolutionary path of both sides of the is a formula like A11 (+ A22 )= 0 does not meet Eq. (16), so
game, we need to obtain the partial derivative of each copy the equilibrium point x0 , y0 is certainly not ESS. Only Eq.
dynamic equation, and then judge the stability strategy (16) and Eq. (17) are satisfied simultaneously is the ESS of
according to the direction of the first derivative. Therefore, the system. Therefore, we just have to think about the other
by obtaining partial derivatives of Eq. (4) and Eq. (8) above, four equilibrium points.
the following formulas can be obtained: According to the stability theorem of differential equa-
( ) tions, the evolutionary stabilization strategy is stable to small
𝜕 dx
dt ( ) disturbances. In mathematics, Eq. (4) and Eq. (8) must be
= (1 − 2x) CR2 − CR1 + yFR1 + 𝛽FR2 − 𝛽yFR2 + 𝛼yM
𝜕x less than 0, which means that the determinant of Eq. (15) is
(11) greater than 0. So, if a strategy is in a stable state, the selec-
( ) tion of the strategy should meet(the) following conditions:
( )
𝜕 dx ( ) dx dy
dt
= x(1 − x) FR1 − 𝛽FR2 + 𝛼M (12) dx
= 0,
𝜕 dt
< 0 or dy = 0,
𝜕 dt
<0
𝜕y dt 𝜕x dt 𝜕y
Therefore, according to the stability of the differential
( ) equation, we can analyze the construction material suppliers
dy
𝜕 ( )
dt
= (1 − 2y) WK − CK + 𝛽FR2 − x𝛽FR2 (13)
𝜕y
Table 5  Stability Analysis of Equilibrium Point
( )
dy
𝜕 ( ) Equilibrium point trJ detJ Stability
dt
= y(y − 1) 𝛽FR2 (14)
𝜕x (0,0)  −  + ESS
(0,1) Uncertain  −  Saddle point
According to the method proposed by Friedman [54], the
(1,0) + + Unstable point
stability of the evolutionary equilibrium can be derived from
(1,1) Uncertain  −  Saddle Point
the local stability analysis of the Jacobi matrix (J).

Table 4  Equilibrium Point Value

ESS A11 A12 A21 A22

(0, 0) CR2 − CR1 + 𝛽FR2 0 0 WK − CK + 𝛽FR2

(0, 1) CR2 − CR1 + FR1 + 𝛼M 0 0 −WK + CK − 𝛽FR2
(1, 0) −CR2 + CR1 − 𝛽FR2 0 0 WK − CK
(1, 1) −CR2 + CR1 − FR1 − 𝛼M 0 −WK + CK
( ) ( ) ) C −C +𝛽F ( )( )
0 WK −CK +𝛽FR2 (
x0 , y0 . −𝛽FR2 0
WK −CK +𝛽FR2 C −C +𝛽F
𝛽FR2
1− 𝛽FR2
FR1 − 𝛽FR2 + 𝛼M R2 R1 R2
1 − 𝛽FR2 −𝛼M−F
R1 R2
𝛽F −𝛼M−F
R2 R1 R2 R1

13
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1931

Table 6  Stability Analysis of Equilibrium Point

Equilibrium point trJ detJ Stability

(0,0) Uncertain  −  Saddle point

(0,1)  −  + ESS
(1,0) Uncertain  −  Saddle point
(1,1) + + Unstable point

Table 7  Stability Analysis of Equilibrium Point

Equilibrium point trJ detJ Stability

(0,0) + + Unstable point

(0,1) Uncertain  −  Saddle point Fig. 2  Simulation results of system dynamic evolution at stable point
(1,0)  −  + ESS
(1,1) Uncertain  −  Saddle point
4 Numerical Analysis

In order to better explore how the construction general con-

Table 8  Stability Analysis of Equilibrium Point
Equilibrium point trJ detJ Stability
(0,0) Uncertain  −  Saddle point
(0,1) + + Unstable point
(1,0) Uncertain  −  Saddle point
(1,1)  −  + ESS
and the construction general contracting, respectively, as
follows:
(1) When CR2 < CR1 − 𝛽FR2 and WK < CK − 𝛽FR2 . The sta-
ble state (ESS) of the system is (0,0) and the stability
analysis of each equilibrium point is shown in Table 5.
(2) When CR2 < CR1 − FR1 − 𝛼M and WK > CK − 𝛽FR2 .
The stable state (ESS) of the system is (0,1) and the
stability analysis of each equilibrium point is shown in
Table 6.
(3) When CR1 − 𝛽FR2 < CR2 < CR1 and WK < CK  . The sta-
ble state (ESS) of the system is (1,0) and the stability
analysis of each equilibrium point is shown in Table 7.
(4) When CR1 − FR1 − 𝛼M < CR2 < CR1 and WK > CK . The
stable state (ESS) of the system is (1,1) and the stability
analysis of each equilibrium point is shown in Table 8.
From the above analysis, we can get the dynamic evolu-
tion game process between the general contractor and the
construction material supplier, as shown in Fig. 2. It can
be seen from Fig. 2 that the square area is divided into four
regions. The size of the four areas represents the evolution
probability of the system in this direction. The size of the
area depends on the location of the saddle point:
tractor supervises the third party, this paper uses MATLAB
software to simulate the evolution process in the above evo-
lutionary game model to verify the influence of different
factors on the evolution results, so as to verify the correct-
ness of the analysis results of the above evolutionary game
model. In order to better illustrate the above situation and
verify its accuracy, we refer to the papers of relevant scholars
and apply some numerical examples in this section [56, 57].
(1) The parameters are set as CR1 = 10, CR2 = 4,
WK = 2, CK = 10, FR1 = 6, FR2 = 6, M = 8, 𝛼 = 0.5, 𝛽 = 0.5  ,
the above condition (1) is satisfied. According to the results
of the simulation program, as shown in Fig.  2, with the
increase in the number of evolutionary iterations, the pro-
portion of the construction general contractor’s supervision
and material supplier selection to supply quality guaran-
teed materials is decreasing, and the stable point of the two
dynamic evolution is (0, 0). This situation shows that when
the benefits obtained by the general contractor for supervi-
sion are less than the difference between the supervision cost
and the punishment for dereliction of duty, and the punish-
ment received by the material suppliers is greater than the
difference between the costs of the materials provided and
less than the ratio of the difference between the costs and the
probability of being punished, that is to say, the punishment
is light. At this time, the selection of the general contractor
of construction tends not to carry out quality supervision,
while the material suppliers choose to be opportunistic and
supply inferior materials. This choice will lead to the con-
struction of security risks, the overall social benefits of the
minimum.
(2) The parameters are set as CR1 = 10, CR2 = 2,
WK = 7, CK = 8, FR1 = 3, FR2 = 6, M = 8, 𝛼 = 0.5, 𝛽 = 0.5 ,
the above condition (2) is satisfied. According to the results
of the simulation program, as shown in Fig.  3, with the

13

1932 Arabian Journal for Science and Engineering (2021) 46:1925–1940

(a) increase in the number of evolutionary iterations, the propor-

tion of supervision by the general construction contractor is
increasing, and the proportion of suppliers supplying quality
and safety materials is decreasing. The stable point of the
dynamic evolution of the system is (0, 1).
This means that when the penalty imposed by the mate-
rial supplier is less than the difference between the supplier’s
cost of supplying quality and safety materials and the cost of
supplying inferior materials. Even if the general contractor
of construction continuously strengthens the supervision, but
the punishment of material suppliers is too small, it will not
have a strong deterrent effect. Therefore, material suppliers
will choose to supply construction materials without quality
assurance. The stable point of the dynamic evolution of the
system is (0, 1). In this case, construction material suppliers
tend to supply construction materials with quality assurance,
(b) and the general contractor of construction chooses not to
carry out quality supervision.
(3) The parameters are set as CR1 = 5, CR2 = 4,
WK = 5, CK = 10, FR1 = 6, FR2 = 6, M = 8, 𝛼 = 0.5, 𝛽 = 0.5 ,
the above condition (3) is satisfied. According to the simula-
tion results, as shown in Fig. 4, with the increase in evolu-
tionary iteration steps, the proportion of suppliers supplying
quality and safety materials is increasing. The proportion
of construction general contractor’s supervision is decreas-
ing. The stable point of the dynamic evolution of the system
is (1,0). This situation indicates that when the punishment
received by the material supplier is greater than the ratio of
the difference between the cost and the probability that the
quality hidden danger exists due to the accident investiga-
tion. Even if the selection of materials is not strong enough,
it will deter the general contractor. Then the rational choice
(c) of construction material suppliers is to supply quality and
safety construction materials.
(4) The parameters are set as CR1 = 5, CR2 = 4,
WK = 10, CK = 5, FR1 = 6, FR2 = 6, M = 8, 𝛼 = 0.5, 𝛽 = 0.5 ,
the above condition (3) is satisfied. According to the results
of the simulation program, as shown in Fig.  5, with the
increase in evolution iteration steps, the proportion of qual-
ity and safety materials supplied by suppliers and the propor-
tion of quality supervision selected by construction general
contractor increase. Finally, the stable point of dynamic
evolution of the two is (1,1). This situation shows that the
benefit of supervision is greater than the loss of supervision,
the punishment of construction material supplier is greater
than the difference between the supplier’s supply quality
safety and unsafe cost, and less than the ratio of material
cost difference and penalty probability, the selection strat-
Fig. 3  Simulation results of system dynamic evolution at stable point egy of construction general contractor is to conduct quality
(0,0) supervision, and the rational choice of material supplier is
to provide Construction materials should be of quality and
safety. When the benefit of supervision is greater than the
loss of supervision, the punishment of material suppliers

13
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1933

(a) (a)

(b)
(b)

(c)

(c)

Fig. 4  Simulation results of system dynamic evolution at stable point

(0,1) Fig. 5  Simulation results of system dynamic evolution at stable point
(1,0)

is greater than the ratio of the difference between the cost

of materials and the probability of punishment. Under the
strict law enforcement of the construction general contrac-
tor, the material suppliers will not choose opportunism. In
this case, the resource advantages of construction general
contractor and material supplier are brought into full play,
both of which control product quality and safety.
The above situations are the results of system evolution
game by adjusting the material cost of suppliers, the super-
vision cost of general contractor and the penalty amount of
government when the moral hazard 𝛼 = 0.5 and the prob-
ability of force majeure 𝛽 = 0.5.

13

1934 Arabian Journal for Science and Engineering (2021) 46:1925–1940

In order to better verify the evolutionary results of the game (a)

model, we assume the parameters of the model simulation
CR1 = 10, CR2 = 5, WK = 4, CK = 8, FR1 = 3, FR2 = 8, M = 4  .
Then, under the condition of keeping these parameters
unchanged, we adjust the parameters of moral hazard a and
probability B of force majeure. We take 𝛼 = 0.2 and 𝛼 = 0.8 ,
corresponding to 𝛽 = 0.1,𝛽 = 0.6 and 𝛽 = 0.9 , respectively,
to analyze the evolution trend of the dynamic game at this
time, and finally get the following results.
(5) We assume that the probability of moral hazard occur-
rence is α = 0.2, and the probability of force majeure is
β = 0.1. The evolutionary game results of the system are
shown in Fig. 6. When other parameters remain unchanged, (b)
the dynamic evolution results of the system will converge
to (0, 0). At this time, the probability of moral hazard and
force majeure is small. In other words, the punishment is
relatively small. Therefore, in this case, the supplier tends
to choose the construction materials whose supply quality is
not guaranteed, and the general contractor also chooses not
to supervise the material quality.
(6) We assume that the probability of moral hazard
occurrence is 𝛼 = 0.2 , and the probability of force majeure
is 𝛽 = 0.6 . The evolutionary game results of the system are
shown in Fig. 7. At this time, when other parameters are
unchanged, the probability of moral hazard is small, but
the probability of force majeure is large, and the dynamic
evolution results of the system will converge to (0, 1). In (c)
other words, in this case, the supplier chooses to speculate
on quality, and the general contractor chooses to supervise
the quality. (Fig. 8)
(7) We assume that the probability of moral hazard occur-
rence is α = 0.2, and the probability of force majeure is
β = 0.9. The evolutionary game results of the system are
shown in Fig. 9. In this case, when other parameters remain
unchanged, the dynamic evolution results of the system will
converge to (1, 1). We can conclude that although the prob-
ability of moral hazard of quality inspection personnel is
small, the probability of force majeure is great. Therefore,
in this case, the supplier chooses to supply materials with
guaranteed quality, and the general contractor also chooses
quality supervision.
(8) We assume that the probability of moral hazard
occurrence is 𝛼 = 0.8 , and the probability of force majeure Fig. 6  Simulation results of system dynamic evolution at stable point
is 𝛽 = 0.1 . The evolutionary game results of the system are (1,1)
shown in Fig. 10. In this case, when other parameters remain
unchanged, the dynamic evolution results of the system will
converge to (0, 0). It can be concluded that although the (9) We assume that the probability of moral hazard
probability of moral hazard of quality inspection personnel occurrence is 𝛼 = 0.8 , and the probability of force majeure
is very high, the probability of force majeure is very small. is 𝛽 = 0.6 . The evolutionary game results of the system are
Therefore, in this case, the supplier chooses to supply mate- shown in Fig. 11. In this case, when other parameters remain
rials with no guaranteed quality, and the general contractor unchanged, the dynamic evolution results of the system will
will not choose quality supervision. converge to (0, 1). Therefore, we find that when the pen-
alty amount caused by force majeure is less than the income

13
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1935

(a) (a)

(b)
(b)

(c)

(d)

Fig. 8  The replication dynamic relationship (0.1)

Fig. 7  Simulation results of system dynamic evolution at stable point

(0,0)
from providing unprotected materials, the supplier will
still choose to supply materials without quality assurance,
while the general contractor will choose quality supervi-
sion because the penalty amount is greater than the cost of
supervision.
(10) We assume that the probability of moral hazard
occurrence is 𝛼 = 0.8 , and the probability of force majeure
is 𝛽 = 0.9 . The evolutionary game results of the system are
shown in Figure 12. In this case, when other parameters
remain unchanged, the dynamic evolution results of the
system will converge to (1,1). Because the probability of
force majeure and the probability of moral hazard of quality

13

1936 Arabian Journal for Science and Engineering (2021) 46:1925–1940

(a) (a)

(b) (b)

(c)
(c)

Fig. 10  Simulation results of system dynamic evolution at stable

point (0,0)

Fig. 9  Simulation results of system dynamic evolution at stable point

(1,1)
inspection personnel are too large, the bribery cost to be paid
is too high. In this case, the material supplier will choose to
supply materials with guaranteed quality, while the general
contractor will choose quality supervision because the pen-
alty amount is greater than the cost of supervision. Through
the analysis of the above game evolution results, we find
that the dynamic evolution results under different influence
factors are indeed different. When the punishment is very
small, the material supplier and the general contractor of

13
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1937

(a) (a)

(b)
(b)

(c)
(c)

Fig. 12  Simulation results of system dynamic evolution at stable

point (1,1)

Fig. 11  Simulation results of system dynamic evolution at stable

point (0,1)
construction will compare which conditions are the most
beneficial to make a decision based on the consideration of
their respective costs.
Using the idea of evolutionary game theory, combining
the construction supply chain with it, the paper analyzes
all the possibilities of decision-making of construction
material suppliers and construction general contractors,
so as to greatly improve the supervision and avoid unnec-
essary cost loss and potential risks.

13

1938
5 Conclusions and Recommendations
The quality of building materials is very important for a
project. Under the condition of information asymmetry
and bounded rationality, the evolutionary game method is
applied to the product quality supervision in the procure-
ment stage, and the evolutionary game model between the
general contractor and the material supplier in the procure-
ment stage is established. It is found that the supervision
cost, penalty amount, material supply cost and probability
of accident risk are the key factors affecting the evolution-
ary game behavior between the general contractor and the
material supplier.
The results show that when the possibility of accident is
high, the penalty amount is greater than the difference of
material cost supplied by the supplier. Even if the general
construction contractor does not take supervision due to
the high cost of supervision, the material suppliers will
still choose to supply quality and safety materials. When
the general contractor of construction strictly controls the
quality of materials, the material supplier will supply con-
struction materials with no guarantee due to insufficient
punishment or the amount of penalty less than the income
brought by inferior materials. Therefore, we find that both
the suppliers and the contractors are closely related to their
own interests.
According to the above conclusions, we also get some
enlightenment.
Firstly, in order to effectively reduce the construction
market environment under the construction risk and pro-
mote the construction material suppliers to provide high-
quality building materials, we need to establish a multi-
party cooperation mode. We should not only strengthen
the quality supervision of building material suppliers,
but also urge and encourage them to improve the supervi-
sion, which is where we should continue to strengthen
the research. The government could build a "Internet
plus" regulatory platform based on modern technology to
improve the transparency of information in upstream and
downstream nodes of the supply chain. It can timely pub-
licize the material quality test report samples and the situ-
ation of the testing laboratory, so as to effectively monitor
the material suppliers and reduce the supervision cost of
the general construction contractor.
Secondly, the enterprises should strengthen the quality
education of quality inspection personnel. The key to avoid
the moral hazard that may exist in the supervision process
is the establishment of a reasonable reward and punishment
system, the project manager must restrict and encourage the
relevant personnel of quality management, so that the quality
inspection personnel can make the right choice.
13
Arabian Journal for Science and Engineering (2021) 46:1925–1940
Thirdly, the specific laws and regulations for quality
supervision should be issued by government as soon as
possible. Under the control of government, the construc-
tion unit is more likely to form an honest social atmos-
phere and avoid accidents as much as possible.
Acknowledgements  The work was supported by the National Natural
Science Foundation of China (No. 71871144). The authors are grateful
to the editors and anonymous reviewers for their suggestions to improve
the quality of the manuscript. Declaration of competitive interests
Compliance with ethical standard 
Conflict interest  The authors state that they have no known competing
financial interests or personal relationships that could affect the work
covered in this paper
Reference
1. Wu, P.; Song, Y.; Zhu, J.B.; Chang, R.D.: Analyzing the influ-
ence factors of the carbon emissions from China’s building
and construction industry from 2000 to 2015. J. Clean. Prod.
221(06), 552–566 (2019)
2. Zeng, B.C.; Ben, J.M.; Yen, P.C.: Rethinking the role of partner-
ships in global supply chains: a risk-based perspective. Int. J.
Prod. Econom. 185(03), 52–62 (2017)
3. Michael, K.: Why shops close again: an evolutionary perspec-
tive on the deregulation of shopping hours. Eur. Econom. Rev.
46(01), 51–72 (2002)
4. Simon, H.A.: Book reviews: models of man, social and rational,
mathematical essays on rational human behavior in a social set-
ting. J. Philos. (1957). https​://doi.org/10.2307/20237​34
5. Mark, B., Chris, C.: Evolutionary game theory. eLs. MIT Press.
(2010). https​://doi.org/10.1002/97804​70015​902.a0005​457.pub2
6. Neumann, J.V.; Morgenstern, O.: Theory of games and eco-
nomic behavior. Princet. Univ. Press (1953). https ​ : //doi.
org/10.1038/15717​2a0
7. William, H.S.: Evolutionary game theory. In: Meyers, R.A.
(Ed.) Encyclopedia of complexity and systems science, pp.
3176–3205. Springer, Heidelberg (2009)
8. Cressman, R.; Apaloo, J.: Evolutionary game theory. In: Basar,
T.; Zaccour, G. (Eds.) Handbook of dynamic game theory, pp.
1–50. Springer, Cham (2016)
9. Fisher, R.A.: Genetical theory of natural selection. Genetics
154, 1419–1426 (2000)
10. Masahiko, U.: Effect of information asymmetry in Cournot
duopoly game with bounded rationality. Appl. Math. Comput.
362, 124535 (2019)
11. Mariano, R.: What model best describes initial choices in a
cournot duopoly experiment? Ssrn Electron. J. (2014). https​://
doi.org/10.2139/ssrn.23734​99
12. Carlos, A.F.; Johannes, B.: Cournot vs. Walras: a reappraisal
through simulations. J. Econom. Dyn. Control 82, 257–272
(2017)
13. Nash, J.F.: The bargaining problem. Econometrica 18(02), 155–
162 (1950)
14. Nash, J.F.: Equilibrium points in N-person games. Proc Natl Acad-
emy Sci. 36(01), 48–49 (1950)
Arabian Journal for Science and Engineering (2021) 46:1925–1940 1939
15. Shen, D., Cruz, J.B.: Nash strategies for dynamic noncooperative
linear quadratic sequential games. Decision and Control. 2007
46th IEEE Conference on. IEEE (2008)
16. Luis, J.G.; Marco, C.; Frank, S.: Solving the simultaneous truel
in the weakest link: nash or revenge? J. Behav. Exp. Econom. 81,
56–72 (2019)
17. Garg, S.: Pandey, O.: Srinivasan, A.: Revisiting the Cryptographic
Hardness of Finding a Nash equilibrium. In: Robshaw M., Katz J.
(eds.) Advances in Cryptology – CRYPTO 2016. Lecture Notes
in Computer Science, pp.579-604.Springer, Berlin, Heidelberg
(2016)
18. Smith, J.M.: The theory of games and the evolution of animal
conflicts. J. Theor. Biol. 47(01), 209–221 (1974)
19. Taylor, P.D.; Jonker, L.: Game dynamics and evolutionary stable
strategies. Math. Biosci. 40(01), 145–156 (1978)
20. Han, T.A.; Pereira, L.M.; Lenaerts, T.: Evolution of commitment
and level of participation in public goods games. Autonom. Ag
Multi-Ag. Syst. 31(03), 561–583 (2016)
21. Jonathan, N.: Evolutionary game theory: a renaissance. Ssrn Elec-
tron. J. (2017). https​://doi.org/10.2139/ssrn.30774​67
22. Lu, H.P.: Current situation and prospect of transportation develop-
ment in China. In: Tandon, M.; Ghosh, P. (Eds.) Mobility engi-
neering, pp. 25–35. Springer, Singapore (2017)
23. Sung, J.J.; Joris, P.: Counterfactual prediction in complete infor-
mation games: point prediction under partial identification. J.
Econom. 216(02), 394–429 (2020)
24. Sylvain, D.; Nicolas, F.: On Monte-carlo tree search for deter-
ministic games with alternate moves and complete information.
ESAIM Prob. Stat. 23, 176–216 (2019)
25. Mehdi, Z.; José, A.F.; Javad, S.; Mehdi, P.; Luca, S.; Pedro, N.M.:
An incomplete information static game evaluating community-
based forest management in Zagros Iran. Sustainability 12(5),
1750 (2020)
26. Zhang, J.; Li, Z.Q.; Zhang, C.Y.: Evolutionary dynamics of strate-
gies without complete information on complex networks. Asian J.
Control 22(1), 362–372 (2020)
27. Luis, H.F.; Ruth, E.C.; José, I.G.: Modelling of a multi-agent sup-
ply chain management system using Colored Petri Nets. Procedia
Manuf. 42, 288–295 (2020)
28. Lisa, M.E.; Monique, L.U.M.: Supply chain management in indus-
trial Marketing–relationships matter. Ind. Mark. Manag. 79, 36–45
(2019)
29. Babak, A.; Toktam, B.; Zahra, H.; Kate, S.M.; Maryam, D.: Pre-
dicting solutions of large-scale optimization problems via machine
learning: a case study in blood supply chain management. Com-
put. Oper. Res. 119, 104941 (2020)
30. Jin, M.Z.; Song, L.J.; Wang, Y.N.; Zeng, Y.C.: Longitudinal coop-
erative robust optimization model for sustainable supply chain
management. Chaos, Solitons Fractals 116, 95–105 (2018)
31. Xiong, F.; Gong, P.; Jin, P.: Supply chain scheduling optimization
based on genetic particle swarm optimization algorithm. Clust.
Comput. 22, 14767–14775 (2019)
32. Biswajit, S.; Muhammad, O.; Namhun, K.: A cooperative adver-
tising collaboration policy in supply chain management under
uncertain conditions. Appl. Soft Comput. 88, 105948 (2020)
33. Jiasen, S.; Guo, L.; Su, X.X.; Wei, D.: Intermodal transportation
service procurement with transaction costs under belt and road
initiative. Transp. Res Part E: Logist. Transp. Rev. 127, 31–48
(2019)
34. Muhammad, S.; Matteo, M.S.: Supply chain coordination to opti-
mize manufacturer’s capacity procurement decisions through a
new commitment-based model with penalty and revenue-sharing.
Int. J. Prod. Econom. 208, 512–528 (2019)
35. Nemati, Y.; Alavidoost, M.H.: A fuzzy bi-objective MILP
approach to integrate sales, production, distribution and procure-
ment planning in a FMCG supply chain. Soft Comput. 23(07),
4871–4890 (2019). https​://doi.org/10.1007/s0050​0-018-3146-5
36. Miguel, M.M.; Abdel, E.M.; Paolo, S.: On the logistics of cocoa
supply chain in Côte d’Ivoire: simulation-based analysis. Comput.
Ind. Eng. 137, 106034 (2019)
37. Song, Z.Z.; Tang, W.S.; Zhao, R.Q.: A simple game theoretical
analysis for incentivizing multi-modal transportation in freight
supply chains. Eur. J. Oper. Res. 283(01), 152–165 (2020)
38. Hallikas, J.; Lintukangas, K.; Grudinschi, D.: Sustainability risk
management in supply chain. In: Zsidisin, G.; Henke, M. (Eds.)
Revisiting supply chain risk, pp. 265–278. Springer series in Sup-
ply Chain Management, Springer, Cham (2019)
39. Ivanov, D.; Tsipoulanidis, A.; Schönberger, J.: Operations and
supply chain strategy. In: Global supply chain and operations
management. Springer texts in business and economics. Springer,
Chams (2019)
40. Barry, B.; Andrew, N.A.: Design for procurement: What pro-
curement driven design initiatives result in environmental and
economic performance improvement? J. Purch. Supply Manag.
23(01), 28–39 (2017)
41. Shu, L.L.; Qu, S.J.; Wu, Z.: Supply chain coordination with opti-
mal pricing and logistics service decision in online retailing. Arab
J. Sci. Eng. 45, 2247–2261 (2020)
42. Zhao, T.Y.; Xu, X.P.; Chen, Y.; Liang, L.; Yu, Y.G.; Wang, K.:
Coordination of a fashion supply chain with demand disruptions.
Transp. Res. Part E: Logist. Transp. Rev. 134, 101838 (2020)
43. Cong, J.; Wang, H.: Research on Three-Level Supply Chain Coor-
dination Based on Revenue Sharing Contract and Option Contract.
In: Xu J., Hajiyev A., Nickel S., Gen M. (eds.) Proceedings of
the Tenth International Conference on Management Science and
Engineering Management. Advances in Intelligent Systems and
Computing. Springer, Singapore pp 1215-1226 (2017)
44. Nelly, B.; Tatyana, C.; Tal, A.: Revenue sharing contracts in a
supply chain: a literature review. IFAC-Papers On Line 52(13),
1578–1583 (2019)
45. Xiao, D.; Wang, J.Y.; Lu, Q.H.: Stimulating sustainability invest-
ment level of suppliers with strategic commitment to price and
cost sharing in supply chain. J. Clean. Prod. 252, 119732 (2020)
46. Maher, A.N.; Agi, Ö.H.: Game theory-based research in green
supply chain management: a review. IFAC-Papers On Line.
52(13), 2267–2272 (2019)
47. Sun, H.X.; Wan, Y.; Zhang, L.L.; Zhou, Z.: Evolutionary game
of the green investment in a two-echelon supply chain under a
government subsidy mechanism. J. Clean. Prod. 235, 1315–1326
(2019)
48. Wang, P.P.; Sun, Z.H.: Optimization analysis of distribution and
distribution based on ASM process. J. Beijing Univ. Inf. Technol.
039(05), 59–63 (2013)
49. Zhang, H.W.; Ling, J.T.; Dong, S.H.; Feng, S.L.: New modifica-
tion method for safety factor of ASME. Consid. Pipeline Big Data.
11(3), 198 (2020)
50. Wang, L.; Yang, B.: Application of BPR and ASME in supplier
selection. J. Liaoning Inst. Technol. 05, 70–73 (2005)
51. Juan, B.; Alvaro, C.C.: Informality costs: informal entrepreneur-
ship and innovation in emerging economies. Strat. Entrep. J.
14(3), 329–368 (2020)
52. Rob, J.M.; Viola, A.; Jochen, O.M.; Laura, V.: Moral hazard
and selection for voluntary deductibles. Health Econom. 29(10),
1251–1269 (2020)
53. Zhao, K.: Research on Price Adjustment of Construction Con-
tract Caused by Force Majeure. Proceedings of 2018 International
13

1940
Conference on Computer, Civil Engineering and Management
Science (ICCEMS 2018).03, 223-229 (2018)
54. Shen, J.R.; Ling, H.: The compound method for the excavation
optimization and stability analysis of high rock slope. J. East
China Inst. Technol. 35(004), 350–357 (2009)
5 5. Holland, J.N.; Deangelis, D.L.; Schultz, S.T.: Evolutionary stabil-
ity of mutualism: interspecific population regulation as an evolu-
tionarily stable strategy. Proc. Royal Soc. B: Biol. Sci. 271(1550),
1807–1814 (2014)
13
Arabian Journal for Science and Engineering (2021) 46:1925–1940
56. Yu, T.; Liu, C.Y.: Evolutionary game analysis and simulation of
government and third party in product quality supervision. Chin.
J. Manag. Sci. 06(24), 90–96 (2016)
57. Huang, H.T.; Liu, Q.M.; Ye, C.M.; Chen, X.: Game analysis of
government procurement contract financing based on blockchain
technology. J. Syst. Simul. 11, 1–11 (2020)