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What is included with this book?
Unique and comprehensive reference describing microeconomic approaches, theories, and models adapted to and developed for the construction industry
Construction Microeconomics provides comprehensive coverage of microeconomics applied to the construction industry, focusing on construction clients, who initiate construction projects, and on contractors who transform the ideas and plans of clients into infrastructure and buildings. With the help of microeconomic theory, it tries to answer questions about decision-making by clients, contractors, and governments with respect to projects in the built environment. It includes discussions of alternative theories to mainstream microeconomics, such as new institutional economics, behavioral economics, and the capability approach. Applications from the construction sector including land supply, sustainability, industrialization, and lean construction are provided to ground the theory in practical construction.
In Construction Microeconomics, readers will learn:
Advanced undergraduate and masters students, lecturers and academics in construction and related disciplines, and professionals in the construction industry looking for expert analysis into a unique facet of the field will find Construction Microeconomics to be a valuable, complete, and authoritative reference on the subject.
Christian Brockmann is Professor of Construction Engineering, Management and Economics at the City University of Applied Sciences, Bremen, in Germany. With over 20 years’ experience in the management of major infrastructure projects as a contractor and consultant, Christian was Project Director for the BangNa Expressway in Thailand and the Port Said Tunnels in Egypt, (both $2b+ projects), and was part of the Owner’s Project Management Team for the Qatar Integrated Railway Project (a $40b+ project).
Foreword by Gerard de Valence
Preface
Introduction 1.1
1.1. Navigating the Maze of Economic Literature
1.1.1. Economics
1.1.2. Microeconomics
1.1.3. Macroeconomics
1.1.4. Construction Economics
1.2. Tools and Presentations.1
1.2.1. Definitions
1.2.2. Economic Scholars
1.2.3. Assumptions
1.2.4. Case Studies
1.2.5. Observations
1.2.6. Summaries
1.3. Methodological Approach
1.3.1. Laws and Regularities
1.3.2. Focus and Goals
1.3.3. Descriptive and Normative Economics
1.4. Theoretical Background
1.4.1. Industrial Economics
1.4.2. New Institutional Economics
1.4.3. Game Theory
1.4.4. Auction Theory
1.4.5. Behavioral Economics
1.4.6. Economics of Information
1.4.7. Law and Economics
1.5. What You Can and Cannot Expect
1.6. Audience
1.6.1. Students
1.6.2. Lecturers
1.6.3. Academics
1.6.4. Contractors
1.6.5. Owners
1.6.6. Policymakers
1.7. Structure of the Text
1.7.1. Basic Economic Principles
1.7.2. Consumers in Perfectly Competitive Markets
1.7.3. Producers in Perfectly Competitive Markets
1.7.4. Interaction in Perfectly Competitive Markets
1.7.5. Imperfect Markets
1.7.6. Factor Markets
1.7.7. Information, Risk, and Uncertainty
1.7.8. Game Theory and Auctions
1.7.9. Construction Sector
1.7.10. Theory of the Owner
1.7.11. Theory of the Contractor
1.7.12. Construction Goods
1.7.13. Construction Markets
1.7.14. Contracting
1.7.15. Market Imperfections
1.7.16. Government
1.7.17. Public Construction Goods
1.7.18. Conclusion
1.7.19. Synopsis
References
Part A: Microeconomics
Case Study 2.1 Berlin (1994)
2.1 Consensual Ideas
2.2 Scarcity and Choice
2.3 Decision-Making
2.3.1 Opportunity Costs
2.3.2 Incentives
2.3.3 Marginal Decisions
2.4 Markets
2.5 Trade and Comparative Advantage
Case Study 3.1 Car or House?
3.1 Perfectly Competitive Markets
3.2 Consumer Behavior
3.2.1 Budget Constraint
3.2.2 Preferences and Utility Funcitons
3.2.3 Utility Maximization
3.3 Demand Curve
3.4 Further Reading
Case Study 4.1 Thinking about Your Own Construction
4.1. Producer Behavior
4.2. Production Theory
4.2.1. Technology
4.2.2. Production Functions
4.3. Cost Theory
4.3.1. Cost Curves for Classical Production Functions
4.3.2. Cost Curves for Neoclassical Production Functions
4.3.3. Cost Curves for Limitational Production Functions
4.3.4. Simplified Cost Function with Constantly Increasing Variable Costs
4.3.5. Long-Run Cost Curves
4.4. Supply Curve
4.4.1. Short-Run Supply Curve of a Firm
4.4.2. Long-Run Supply Curve of a Firm
4.4.3. Market Supply Curve
Case Study 5.1: Your Own Company, a Precast
5.1. Equilibrium Price and Quantity
5.2. Comparative Statics
5.3. Elasticities of Demand and Supply
5.4. Consumer and Producer Surplus
5.5. Time-Dependent Supply Curves and Market Outcomes
5.5.1 Very-Short-Run Supply Curve
5.5.2 Short-Run Supply Curve
5.5.3 Long-Run Supply Curve
5.6. Welfare
5.7. Efficiency and Equity
Case Study 5: Why Do You Always Have to Deal with Competition?
6.1. Monopoly
6.1.1. Normal Monopolies
6.1.2. Natural Monopolies
6.2. Monopolistic Competition
6.3. Monopsony
6.4. Oligopoly
Case Study 7.1 Demand or Supply?
7.1. Factor Supply of Households
7.1.1. Labor Supply
7.1.2. Capital Supply
7.2. Factor Demand of Firms
7.3. Demand and Supply on Factor Markets
Case Study 8.1 Uncertainty?
8.1 Uncertainty
8.1.1 Risk Attitudes
8.1.2 Risk Strategies
8.1.3 Transaction Cost
8.2 Information
8.2.1 Satisficing Model of Decision-Making
8.2.2 Asymmetric Information
Reference
Case Study 9.1 Bidding
9.1 Game Theory
9.1.1. Basics of Game Theory
9.1.2. Static Games with Complete Information
9.1.3. Dynamic Games with Complete Information
9.2 Auctions
9.1.4. Basics of Auctions
9.1.5. English and Vickrey Auctions
9.1.6. Dutch Auctions and Sealed-Bid Auctions
9.1.7. Competitive Bidding
Part B: Applied Construction Microeconomics
10 Construction Sector
10.1. Definition
10.2. Economic Contribution
10.2.1. Value-Added Concept
10.2.2. Investment Concept
10.2.3. Multiplier Concept
10.3. Actors in the Construction Sector
10.3.1. Market Demand
10.3.2. Market Supply
10.4. Summary of the Construction Sector
11 Theory of the Owner
11.1. The Owner as an Entity
11.1.1. Terminology
11.1.2. Images and Prejudices
11.1.3. Organization
11.2. Tasks of the Owner
11.3. Behavior of the Owner
11.3.1. Consumers Buying Construction Goods
11.3.2. Producers Buying Construction Goods
11.4. Information of the Owner
11.5. Developing a Contract
11.6. Procurement of a Contractor
11.7. Supervision of the Construction Process
11.8. Summary
12 Theory of the Contractor
12.1. The Contractor as an Entity
12.1.1. Cooperation
12.1.2. Organization
12.2. Tasks of the Contractor
12.3. Behavior of the Contractor
12.3.1. Strategy
12.3.2. Legal Organization
12.3.3. Growth of the Firm
12.4. Information of the Contractor
12.5. Bidding and Pricing
12.6. Contractor Pricing
12.7. Production
12.7.1. General Characteristics
12.7.2. Production Determinants
12.7.3. Production Functions and Cost Curves
12.7.4. Production Decisions
12.8. Summary
13 Construction Goods
13.1 Goods and Services
13.1.1. Heterogeneity
13.1.2. Construction Goods as Transitional Performance Bundles
13.1.3. Construction Goods as Contract Goods
13.1.4. Construction Goods as Investment
13.1.5. Construction Goods as Services
13.1.6. Summary of the Characteristics of Construction Goods
13.2 Typology of Construction Goods
13.2.1 Approach to Developing a Typology
13.2.2 Conceptualization
13.3.3 Applications
13.3 Summary
14 Construction Markets
14.1. Characteristics of Markets
14.2. Particularities of Construction Markets
14.2.1 Goods
14.2.2 Owners
14.2.3 Markets
14.2.4 Summary
14.3. Analysis of Construction Markets
14.3.1 Heterogeneity
14.4. Owners
14.5. Contractors
14.5.1 Supply
14.5.2 Information
14.6. Geography of Construction Markets
14.6.1. Regional Markets
14.6.2. National Markets
14.6.3. International Markets
14.6.4. Multinational Markets
14.6.5. Global Players and Global Markets
14.7. Entry and Exit Barriers
14.7.1. Effects of the Business Cycle
14.7.2. Number of Exits and Entries
14.8. Summary
15 Contracting
15.1. Construction Goods
15.2. Construction Markets
15.3. Owner's Demand
15.4. Contractor's Supply
15.5. Construction Contracts
15.6. Contracting Market Design
15.7. Pricing of Construction Contracts
15.7.1. Marginal Cost Decisions Versus Markup Pricing
15.7.2. Auctioning
15.7.3. Sealed-Bid Auctions
15.8. Supply and Demand in Construction
15.9. The Owner as Monopsonist
15.10. Bargaining for the Contract Price
15.11. Change Orders and Claims
15.12. Summary
16 Market Imperfections
16.1. Imperfect Information
16.2. Externalities
16.3. Collusion and Corruption
16.3.1 Collusion
16.3.2 Corruption
16.4. Mechanics or Ethics of Collusion
16.5. Conclusion
17 Government
17.1. Government as Actor on Markets
17.2. Taxes and Subsidies
17.3. Regulations
17.4. Interest Rates
17.5. Inflation
18 Public Goods
18.1. Characteristics of Private Goods
18.1.1 Rivalry
18.1.2 Excludability
18.2. Theory of Public Goods
18.2.1 Demand of a Public Good Based on Utility
18.2.2 Demand for a Public Good Based on Willingness to Pay
18.3. Free Riding
18.4. Cost–Benefit Analysis
18.5. Construction Goods as Public Goods
18.6. Strategic Misrepresentation and Optimism Bias
19 Conclusion
19.1. Methodical Context
19.2. Owners
19.3. Contractors
19.4. Construction Goods
19.5. Construction Markets
19.6. Contracting
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