Research Article
Dec 1982
General Bidding Model
Publication: Journal of the Construction Division
Volume 108, Issue 4
Abstract
The general model of competitive bidding is not limited by the assumptions on which Friedman's and Gates' models depend. It is applicable to competition for which a contractor's cost distribution and opponents' bid distributions can be estimated. Historical data of contractor's cost and competitors' bids on different projects produce a distribution for the ratio between them, the bid/cost ratio. Standardized distributions for contractors' cost and competitors' bids, estimated to have respective means of one and the mean bid/cost ratio and to have equal variance, are inserted into the general model. Results are compared with Friedman's and Gates' models for competition against average competitors. Because markup adjustments are counterbalanced by shifts in probability of winning, contractor expected value is not very sensitive to markup, or its method of selection. However, the models vary considerably in their estimates of expected value. Gates' model is always more accurate than Friedman's model where variance of bids is due to variance of costs.
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Published In
Journal of the Construction Division
Volume 108 • Issue 4 • December 1982
Pages: 639 - 650
Copyright
© 1982 American Society of Civil Engineers.
History
Published in print: Dec 1982
Published online: Feb 11, 2021
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Authors
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Robert I. Carr, M.ASCE
Prof., Dept. of Civ. Engrg., Univ. of Michigan, Ann Arbor, Mich. 48109
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ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.
Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.