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Rationality in bidding theory: a construction industry perspective

Zhu, Chunxue (2008) Rationality in bidding theory: a construction industry perspective. In Casensky, Martin, Ahmed, Vian, Eaton, David, & Sutrisna, Monty (Eds.) BuHu 8th International Postgraduate Research Conference, June 26th-27th 2008, The Czech Technical University of Prague (CVUT), Czech Republic.

Abstract

Abstract: Since the publication of Friedman's paper in 1956, bidding theory has gained popularity in academic research. However, despite the many publications and a long history, bidding theory is still to gain general acceptance and is largely lacking in implementation – particularly in the construction industry. The major problem seems to be the rather unrealistic assumptions involved. Of these, the assumption of rationality is the most critical as it is well accepted outside economic circles that people's thoughts and behaviours are not strictly rational in the economic sense. This paper investigates rationality in economic theories to help understand the rational assumptions implicit in bidding theory; the ramifications of departures from these assumptions and possible adjustments needed to existing theory to align it more closely with practice. The discussion begins with an exploration of rationality and its importance in economic study, followed by a review of the rational assumptions underlying bidding theory. Finally, research gaps are identified and suggestions for improvement are provided.

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ID Code: 14103
Item Type: Conference Paper
Additional URLs:
Keywords: Bidding theory, rationality, rational assumption, bounded rationality
ISBN: 9788001040928
Subjects: Australian and New Zealand Standard Research Classification > ENGINEERING (090000) > CIVIL ENGINEERING (090500) > Construction Engineering (090502)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Copyright Owner: Copyright 2008 (please consult author)
Deposited On: 17 Jul 2008
Last Modified: 03 Mar 2011 15:45

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