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Bid Spread: an analysis of Hong Kong data

Skitmore, Martin, Drew, Derek S., & Ngai, Stephen C. (2000) Bid Spread: an analysis of Hong Kong data. In Serpell, A. (Ed.) Information and Communication in Construction Procurement, the International Council for Building Research Studies and Documentation (CIB) W-92 Procurement System Symposium, Santiago, Chile.

Abstract

Analysis of the difference between the lowest and second lowest bids, or bid-spread, in a ‘lowest wins’ auction is of possible value in strategic bidding; providing an indication of mistakes in bids; determining a justifiable amount of bid security; and a means of providing some insight into the consequences of non-traditional auction arrangements. Bid-spread analysis, as developed in this paper, provides some explanations concerning the nature of bids and their statistical properties. In particular, it is shown here that, through the analysis of a data set of Hong Kong bidding data, that the bid-spread is directly (lineally) proportional to the contract size value. The percentage bid-spread is found to be a function of the number of bidders and the lower order statistics of the uniform density function.

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ID Code: 4505
Item Type: Conference Paper
Keywords: Bidding, tendering, spread, money left on the table, Vickrey Auction, statistical models
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Copyright Owner: Copyright 2000 (please consult author)
Deposited On: 19 Jun 2006
Last Modified: 10 Aug 2011 23:55

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