Dept. of Civil Engineering, Faculty of Engineering, Payame Noor University, Tehran, Iran
Department of Project Management and Construction, Science and Research Branch, Islamic Azad University, Tehran, Iran
Dept. of Technical- Engineering, Imam Khomeini International University, Qazvin, Iran
Dept. of Civil Engineering, Iran University of Science and Technology, Tehran, Iran
Quantitative approaches to risk allocation have been developed to overcome the limitation of qualitative approaches and to determine how the responsibility of risk should be shared between contracting parties. This paper integrates a system dynamics simulation scheme with fuzzy bargaining game theory for quantitative risk allocation. The behaviour of contracting parties in the quantitative risk allocation negotiation process is modelled as players' behaviour in a game. A system dynamics based model is employed to determine the contractor and client costs (players' payoffs)at different percentages of risk allocation. Having determined the players' payoffs, the common interval between the players' acceptable risk allocation percentages is determined. The bargaining process is then performed between two parties accounting for the common interval and a desirable and equitable percentage of risk allocation is determined.