Negotiation based project risk management framework

In view of the distribution feature of decision-making between owner and contractors, a novel decision-making framework based on negotiation is proposed. The owner and contractors negotiate on completion time in order to obtain the expected completion probability of a project with the constraint of cost. Considering the dynamic property of risks, Markov process is used in each subproject. The evaluation mechanism of the owner is presented based on program evaluation and review technique (PERT) and negotiation tactics are designed. Numerical analysis shows that this framework can achieve effective risk management.