Estimating the number of new and repeated bidders in construction auctions

Ballesteros-Pérez, P. and Skitmore, M. (2016) Estimating the number of new and repeated bidders in construction auctions. Construction Management and Economics, 34 (12). pp. 919-934. ISSN 0144-6193 doi: 10.1080/01446193.2016.1231408

Abstract/Summary

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.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/66559
Item Type	Article
Refereed	Yes
Divisions	Science > School of the Built Environment
Publisher	Taylor & Francis
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