Partnering Contracts and the inefficient Nash Equilibrium

Christina D. Tvarnø, Henriette Schleimann

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This paper discusses partnering contracts in Denmark and Great Britain, analyses the legal content and applies game theory and the Prisoners’ Dilemma game on some of the legal clauses and objectives. The paper defines partnering contracts as alternative social contracts relevant when forming a strategic alliance or another long-term relationship with a certain degree of specificity and frequency. The paper focuses on partnering in the construction industry and compares the clauses in both Danish and British partnering contracts. Based on the analysis, the paper sets up a scientific definition regarding the aim of partnering contracts and shows that economic theory can explain the legal clauses in the partnering contract, and the partnering contract can solve inefficiency in the Nash equilibrium in the Prisoners’ Dilemma game. The
partnering contract makes it possible to obtain the benefit from joint utility and the paper proposes some legal improvements in this regard.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School [wp]
Number of pages17
Publication statusPublished - 2019
SeriesCBS LAW Research Paper

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