Modeling conflicting incentives in engineering senior capstone projects: A multi-player game theory approach

2026-01-15

AI Summary

This study addresses incentive misalignment, information asymmetry, and strategic interdependence among students, faculty, and industry sponsors in engineering capstone projects, which often arise from divergent objectives. It introduces, for the first time, a formal multi-agent game-theoretic framework tailored to this setting, modeling the interaction as a three-player sequential Bayesian game with the university acting as a constrained Stackelberg leader. The model incorporates stakeholder-specific utility functions and reduced-form outcome mappings to capture strategic behavior under incomplete information. Under standard assumptions, it reproduces canonical equilibria—including cooperative participation, sponsor-dominated exploitation, and student grade-point gaming—thereby elucidating how curricular policies shape project dynamics through incentive structures. This framework offers a structured analytical tool for institutional design and incentive alignment in capstone education.

Technology Category

• Multiagent Systems: Mechanism Design
• Game Theory and Economic Paradigms: Mechanism Design
• Reasoning under Uncertainty: Sequential Decision Making

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Responsible Web: Machine-in-the-loop, human agency and autonomy
• Graph Algorithms and Modeling for the Web: Algorithms and analysis for incomplete, noisy, or partially observed Web-related graphs

Abstract

University engineering capstone projects involve sustained interaction among students, faculty, and industry sponsors whose objectives are only partially aligned. While capstones are widely used in engineering education, existing analyses typically treat stakeholder behavior informally or descriptively, leaving incentive conflicts, information asymmetries, and strategic dependencies underexplored. This paper develops a formal game-theoretic framework that models capstone projects as a sequential Bayesian game involving three players: the university, the industry sponsor, and the student team. The framework is intended as an analytical and explanatory tool for understanding how institutional policy choices, such as grading structures, intellectual property rules, and sponsor engagement expectations, shape stakeholder behavior and project outcomes, rather than as a calibrated or predictive model. The university acts as a constrained Stackelberg leader by committing to course policies and assessment structures while anticipating strategic responses by sponsors and students under incomplete information. Reduced-form outcome functions capture technical quality, documentation quality, timeliness, alignment with sponsor needs, and publishability, while payoff functions reflect stakeholder-specific objectives and costs. Under standard assumptions, the model admits stable equilibrium regimes that correspond to empirically recognizable capstone dynamics observed in practice, including cooperative engagement, sponsor-dominated exploitation, and student grade gaming. Rather than claiming precise prediction, the framework provides a structured basis for reasoning about incentive design, policy tradeoffs, and structural failure modes in project-based learning environments, as well as for future extensions incorporating richer dynamics, repeated interaction, and empirical calibration.

Problem

• incentive conflicts
• capstone projects
• game theory
• stakeholder behavior
• information asymmetry

Innovation

• game theory
• capstone projects
• Bayesian game
• incentive design
• Stackelberg equilibrium