Fachinformationsdienst BAUdigital

A platform for research: civil engineering, architecture and urbanism

    Standard Deviation of Bids for Construction Contract Auctions

    Previous research has confirmed that the distribution of bids for construction auctions can be reasonably modeled with Lognormal distribution. The location parameter of this distribution (the mean μ ) has been found to have a good linear correlation with the bidders’ cost estimates. However, the scale parameter (standard deviation of the bids, σ ) remains noticeably difficult to anticipate. By analyzing 13 construction auction datasets, hard evidence is provided that the high variability of σ observed in construction auctions is mostly due to sample size (number of bids per auction). Moreover, we show that the coefficient of variation ( σ / μ ) of log-transformed bids follows the same χ 2 distribution in uncapped auctions. This means the σ ′ s population value in similar auctions is nearly proportional to μ provided the bid price is not upper limited. Other findings are that more frequent bidders do not tend to bid lower, but their dispersion is narrower than sporadic bidders. These findings allow the introduction of important simplifications in construction bidding models, especially when access to historical data is limited.

    Access

    Check access
    Check availability in my library
    Order at Subito €

    Access

    Check access
    Check availability in my library
    Order at Subito €

    Page navigation

    Document information
    Similar titles

    Export, share and cite

    Standard Deviation of Bids for Construction Contract Auctions

    Previous research has confirmed that the distribution of bids for construction auctions can be reasonably modeled with Lognormal distribution. The location parameter of this distribution (the mean μ ) has been found to have a good linear correlation with the bidders’ cost estimates. However, the scale parameter (standard deviation of the bids, σ ) remains noticeably difficult to anticipate. By analyzing 13 construction auction datasets, hard evidence is provided that the high variability of σ observed in construction auctions is mostly due to sample size (number of bids per auction). Moreover, we show that the coefficient of variation ( σ / μ ) of log-transformed bids follows the same χ 2 distribution in uncapped auctions. This means the σ ′ s population value in similar auctions is nearly proportional to μ provided the bid price is not upper limited. Other findings are that more frequent bidders do not tend to bid lower, but their dispersion is narrower than sporadic bidders. These findings allow the introduction of important simplifications in construction bidding models, especially when access to historical data is limited.

    Access

    Check access
    Check availability in my library
    Order at Subito €

    Standard Deviation of Bids for Construction Contract Auctions

    Previous research has confirmed that the distribution of bids for construction auctions can be reasonably modeled with Lognormal distribution. The location parameter of this distribution (the mean μ ) has been found to have a good linear correlation with the bidders’ cost estimates. However, the scale parameter (standard deviation of the bids, σ ) remains noticeably difficult to anticipate. By analyzing 13 construction auction datasets, hard evidence is provided that the high variability of σ observed in construction auctions is mostly due to sample size (number of bids per auction). Moreover, we show that the coefficient of variation ( σ / μ ) of log-transformed bids follows the same χ 2 distribution in uncapped auctions. This means the σ ′ s population value in similar auctions is nearly proportional to μ provided the bid price is not upper limited. Other findings are that more frequent bidders do not tend to bid lower, but their dispersion is narrower than sporadic bidders. These findings allow the introduction of important simplifications in construction bidding models, especially when access to historical data is limited.

    Access

    Check access
    Check availability in my library
    Order at Subito €

    Access

    Check access
    Check availability in my library
    Order at Subito €

    Page navigation

    Document information
    Similar titles

    Export, share and cite

    Document information
    Title:

    Standard Deviation of Bids for Construction Contract Auctions

    Contributors:

    Ballesteros-Pérez, Pablo (author) / Skitmore, Martin (author) / Cerezo-Narváez, Alberto (author) / González-Cruz, Mª Carmen (author) / Pastor-Fernández, Andrés (author) / Otero-Mateo, Manuel (author)

    Published in:

    Journal of Construction Engineering and Management ; 147

    Publication date:

    2021-06-14

    ISSN:

    0733-9364 , 1943-7862

    DOI:

    https://doi.org/10.1061/(ASCE)CO.1943-7862.0002118

    Type of media:

    Article (Journal)

    Type of material:

    Electronic Resource

    Language:

    Unknown

    Similar titles

    On the distribution of bids for construction contract auctions

    Ballesteros-Pérez, Pablo | Online Contents | 2017

    On the distribution of bids for construction contract auctions

    Ballesteros-Pérez, Pablo / Skitmore, Martin | British Library Online Contents | 2017

    On the distribution of bids for construction contract auctions

    Ballesteros-Pérez, Pablo / Skitmore, Martin | Taylor & Francis Verlag | 2017

    NOTICE BOARD - Bids, awards and auctions

    Online Contents | 2009

    Effect of Electronic Reverse Auctions on Competition and Abnormally Low Bids in Public Construction Procurement

    Hanák, Tomáš / Marović, Ivan / Jajac, Nikša | BASE | 2018

    Free access
    Back to top