Predicting the probability of winning sealed bid auctions: the effects of outliers on bidding models
Skitmore, Martin (2004) Predicting the probability of winning sealed bid auctions: the effects of outliers on bidding models. Construction Management and Economics, 22(1), pp. 101-109.
This paper is concerned with the effect of outliers on predictions of the probability of tendering the lowest bid in sealed bid auctions. Four of the leading models are tested relative to the equal probability model by an empirical analysis of three large samples of real construction contract bidding data via all-in (in-sample), one-out and one-on (out-of-sample) frames. Outliers are removed in a sequence of cut-off values proportional to the standard deviation of bids for each auction. A form of logscore is used to measure the ability to predict the probability of each bidder being the lowest. The results show that, although statistically significant in some conditions, all the models produce rather poor predictions in both one-out and one-on mode, with the effects of outliers being generally small
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|Item Type:||Journal Article|
|Keywords:||Bidding models, bidding theory, construction contracts, empirical tests, predicted probability, probability of lowest bid, sealed bid auctions, tendering theory, logscore test, outliers|
|Subjects:||Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Building Construction Management and Project Planning (120201)
|Divisions:||Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Urban Development
|Copyright Owner:||Copyright 2004 Taylor & Francis|
|Copyright Statement:||First published in Construction Management and Economics 22(1):pp. 101-109.|
|Deposited On:||03 Feb 2006 00:00|
|Last Modified:||29 Feb 2012 13:04|
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