A common approach for procuring large construction projects is through Unit Price Contracts. By the means of a simple model, we study the optimal quantity to procure under uncertainty regarding the actual required quantity given that the procurer strives to minomize expected total costs. The...

A common approach for procuring large construction projects is through Unit Price Contracts. By the means of a simple model, we study the optimal quantity to procure under uncertainty regarding the actual required quantity given that the procurer strives to minimize expected total costs. The...

The first aim of this paper is to clarify the meaning of moral hazard in the context of construction procurement. Two important points are that typically there is a double moral hazard problem, as the client also can “misbehave” in a number of ways, and that both internal moral hazard...