Bidding strategy: Winning overkey competitors

Research output: Contribution to journalArticle

Abstract

This paper presents a method by which the probability of winning in the competitive bidding problem can be improved by obtaining additional information concerning a key competitor. The competitive bidding problem as suggested by Friedman consists of describing the bidding behavior of each competitor by developing a probability density function representing the distribution of the ratio of a competitor’s bid to “our” cost estimate. This static distribution for a key competitor is improved by maintaining a volume-time function on competitor k. A function relating the markup of competitor k’s static distribution function, thereby improving the calculation for the probability of winning over (defeating) competitor k. Equations for combining the probability of winning over competitor k with the probability of winning over other competitors is also presented.

Original languageEnglish (US)
Pages (from-to)151-165
Number of pages15
JournalJournal of Construction Engineering and Management
Volume118
Issue number1
DOIs
StatePublished - Jan 1 1992

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ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Building and Construction
  • Industrial relations
  • Strategy and Management

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