Cooperation and Competition when Bidding for Complex Projects: Centralized and Decentralized Perspectives

Abstract

To successfully complete a complex project, be it a construction of an airport or of a backbone IT system, agents (companies or individuals) must form a team having required competences and resources. A team can be formed either by the project issuer based on individual agents' offers (centralized formation); or by the agents themselves (decentralized formation) bidding for a project as a consortium---in that case many feasible teams compete for the contract. We investigate rational strategies of the agents (what salary should they ask? with whom should they team up?). We propose concepts to characterize the stability of the winning teams and study their computational complexity.