modeling the relationship between the government and contractor interms of lack of capital investment using game theory (case study: energy projects)

in this paper, we analyze the effect of lack of capital investment on energy projects using game theory in the guise of cooperative games. we focus on the energy projects in the provincial level as case study during 2010-2011. therefore, we design a theoretical model of the lack of capital investment as a factor influencing the implement of energy projects. in the experimental section, we determine the pay-off cooperative game based on the equilibria obtained from case study, as well as using nash bargaining solution. the results indicate that two players (government and private sector (contractor)) choose cooperative coalition since they take more gains rather than independent coalition of state. in this case, the government has higher bargaining power despite its lower discount rate, but contractor fears that the government performs projects with itself contractors. for this reason, the contractor will have lower bargaining power, and the government’s share in cooperative coalition will be higher.