REMOTE MANAGEMENT AND ARTIFICIAL INTELLIGENCE: MITIGATION OF TRANSACTION COSTS AND OPPORTUNISM IN CONSTRUCTION WORKS

Abstract: Construction projects exhibit high transaction costs driven by monitoring needs and opportunism under information asymmetry. Yet intensive face-to-face inspection can itself become a conflict trigger by fostering perceptions of policing and unfairness. We analyze two field cases of AI-enabled remote monitoring (Optikon) as a depersonalized governance mechanism that shifts enforcement from interpersonal confrontation to auditable digital evidence. Using six months of productivity and financial data (>170 samples) and over 13,000 behavioral records, we document reduced conflict latency and improved compliance outcomes following implementation. In a mining contract, helmet compliance increased from 9.54% to 73.60% within one week, consistent with an “awareness trigger” followed by evidence-based managerial intervention. In a dam project monitored fully remotely, man-hour turnover reached USD 54.75/HH, exceeding national benchmarks. We discuss boundary conditions related to contestability, privacy safeguards, and algorithmic control.

Keywords: Transaction Costs; Artificial Intelligence; Conflict Management; Remote Monitoring; Construction Industry