Estimating the number of new and repeated bidders in construction auctions

Ballesteros-Pérez, Pablo & Skitmore, Martin (2016) Estimating the number of new and repeated bidders in construction auctions. Construction Management and Economics, 34(12), pp. 919-934.

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Abstract

The number of new bidders – bidders from whom there is no previous registered participation – is an important variable in most bid tender forecasting models, since the unknown competitive profile of the former strongly limits the predictive accuracy of the latter. Analogously, when a bidder considers entering a bid or when an auctioneer is handling a procurement auction, assessing the likely proportion of experienced bidders is considered an important aspect, as some strategic decisions or even the awarding criteria might differ.

However, estimating the number of bidders in a future auction that have not submitted a single bid yet is difficult, since there is no data at all linking their potential participation, an essential requirement for the implementation of any forecasting or estimation method.

A practical approach is derived for determining the expected proportion of new bidders to frequent bidders as a function of the population of potential bidders. A multinomial model useful for selective and open tendering is proposed and its performance is validated with a dataset of actual construction auctions. Final remarks concern the valuable information provided by the model to an enduring unsolved bidding problem and the prospects for new research continuations.

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ID Code: 99779
Item Type: Journal Article
Refereed: Yes
Keywords: Modelling, Forecasting, Bidding, Tendering, New bidders
DOI: 10.1080/01446193.2016.1231408
ISSN: 1466-433X
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Building Construction Management and Project Planning (120201)
Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Copyright Owner: Copyright 2016 Informa UK Limited, trading as Taylor & Francis Group
Deposited On: 10 Oct 2016 23:16
Last Modified: 25 Oct 2016 04:48

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