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Advances in Civil Engineering Volume 2019 ,2019-07-21
Insurance Crisis, Legal Environment, and the Sustainability of Professional Liability Insurance Market in the Construction Industry: Based on the US Market
Research Article
Yiguang Pan 1 Xiaomei Deng 1 Rashid Maqbool 1 Weirui Niu 1
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DOI:10.1155/2019/1614868
Received 2019-05-10, accepted for publication 2019-07-03, Published 2019-07-03
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摘要

PLI (professional liability insurance) is currently the main method used to control construction practice risk and is an important economic measure of construction industry governance. Few literatures have analyzed the sustainability of the liability insurance market. In particular, the research on the sustainability of the PLI market in the construction industry is still blank. The sustainability of the market can be identified with the equilibrium of the system over a certain period of time. From the perspective of cooperation benefits, this paper adopts evolutionary game theory (EGT) to analyze the evolutionary trends of stakeholders’ behaviors and their evolutionarily stable strategy (ESS) in the PLI market of the construction industry. A case study from the history of the US PLI market evolution over nearly 100 years is taken to illustrate the stakeholder game and interpret the market evolution path, and several typical stages of the development of the US PLI market are explored. Some factors that can cause a shift in equilibrium are found. The results show that the change in the legal environment will directly affect the payoffs of the stakeholders, cause market imbalance, and trigger crisis. These findings will help out the government to regulate the market in a timely manner by improving external factors, such as by building a sound credit system and ensuring the stability of the legal system. In an equilibrium state, competitive markets can eliminate individuals with high accident rates and companies with high operating costs. Moreover, these findings will also set a base for future researches to investigate the role of insurance market and legal environment in depth while providing the intensive critical factors towards sustainable construction industry.

授权许可

Copyright © 2019 Yiguang Pan et al. 2019
This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

通讯作者

Xiaomei Deng.Department of Construction Management, Tsinghua University, Beijing, China, tsinghua.edu.cn.dengxm@tsinghua.edu.cn

推荐引用方式

Yiguang Pan,Xiaomei Deng,Rashid Maqbool,Weirui Niu. Insurance Crisis, Legal Environment, and the Sustainability of Professional Liability Insurance Market in the Construction Industry: Based on the US Market. Advances in Civil Engineering ,Vol.2019(2019)

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