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We present results of several experiments that deal with endogenous entry in auctions and auction valuation. One observation that is constant across all the experiments we report is that laboratory subjects have a difficult time evaluating potential gains from auctions. Even after they are given some experience with particular auctions, the uncertainty inherent in the auctions (the probability of winning as well as the potential gains from winning) makes it difficult for subjects to compare different auction mechanisms. This highlights the need for new experimental procedures to be used for testing theories that involve endogenous auction entry in the laboratory.

Insufficient time allocation for the bidding period occurs, causing drawbacks to both parties, the client and the bidder. Hence, this study aims to evaluate the time allocated for preparing a bid proposal as per the National Competitive Bidding (NCB) in the Sri Lankan context.

The study has adopted a mixed method approach and expert interviews and document review to detect, analyse and validate the issues, and solutions based on NCB along with the adequacy of the allocated bidding period used as main data collection tools. Both qualitative and quantitative data were analysed through manual content analysis and inferential analysis respectively.

Overall, 24 local issues with the existing competitive bidding process and solutions for each were identified. Among the 24 local issues, it was unanimously agreed by all interviewees that three specific issues require attention and improvement. These issues are related to the standard and incompleteness of bidding documents, inaccurate BOQ quantities measured by the consultant or the main contractor, and the excessive number of bidding document amendments by the consultant. It was revealed that a maximum of 42 calendar days (6 weeks) is sufficient for the bidding process while a minimum of 21 calendar days (3 weeks) is insufficient.

The findings of this study would be recommended that Information and Communication Technology Agency (ICTA) understand the necessity of revising the NCB reference to the time allocated for the preparation of bids. By recognising the importance of sufficient time allocation for bid preparation, this research serves as a practical guide for authorities involved in policy formulation, aiding them in implementing revisions that align with the dynamic requirements of bidding procedures.

Traditionally, construction projects are awarded based on the lowest submitted tendering prices. However, this awarding method often causes problems on project delay, poor risk assessment and increased claims from variations. This paper aims to address these issues.

Nowadays, clients require tenderers to submit both bidding prices and contract duration. This bidding method is called an optimal price‐time bidding model, the details of which are investigated in this paper, using 24 Hong Kong private and public foundation price‐time contracts.

The results show that private foundation projects produce better time and cost savings when compared with public foundation projects, meaning that the former are generally more effective in using the optimal price‐time bidding model than in public foundation projects. To further explore the effectiveness of the price‐time bidding model, case studies from a private and a public foundation project are investigated to show that private foundation projects using the price‐time bidding model are more effective than public foundation projects.

This paper encourages contractors to consider both time and cost factors in tendering and construction processes, noting that high liquidated and ascertained damages (LAD) charges need to be applied. This can provide a “balanced environment” for contractors in the construction industry.

Competitive bidding today demands both speed and judgement. It is not just a case of seeing a contract that 'looks all right' but of weighing up its individual features and relating the future prospects to past experience. Even so, though experience may be an important factor in the appraisal, there is always the possibility that a particular contract may have an obscure twist to it which will make it unprofitable in the long‐run.

Essentially there are three types of competitive bids or price quotes: fixed price bids, cost‐plus markup bids, and incentive (risk‐sharing) bids. An “Expected Present Value” (EPV) model of competitive bidding is presented which establishes the requirements for the maximisation of the firm's expected present value of net worth. Reconciliation of the EPVC and the markup procedure allows an examination of the issues that must be considered in order that the firm's bid prices and quotes best serve the objective of net worth maximisation when information search costs are expected to be prohibitive. Observations suggest that firms do not attempt to maximise their net worth, preferring instead to pursue target rates of capacity utilisation and profitability. Therefore the EPVC model does not explain or predict the behaviour of all bidding firms. A behavioural model is suggested, based on the positive starting point of business practice. This enables firms to do what they do better. Based on what they already do, it holds few surprises or complexities and requires little information on complex issues and so obviates the need for substantial expenditure on search costs.

Ratios were constructed using bidding data for highway construction projects in Texas to study whether there are useful patterns in project bids that are indicators of the project completion cost. The use of the ratios to improve predictions of completed project cost was studied.

Ratios were calculated relating the second lowest bid, mean bid, and maximum bid to the low bid for the highway construction projects. Regression and neural network models were developed to predict the completed cost of the highway projects using bidding data. Models including the bidding ratios, low bid, second lowest bid, mean bid and maximum bid were developed. Natural log transformations were applied to the data to improve model performance.

Analysis of the bidding ratios indicates some relationship between high values of the bidding ratios and final project costs that deviate significantly from the low bid amount. Addition of the ratios to neural network and regression models to predict the completed project cost were not found to enhance the predictions. The best performing regression model used only the low bid as input. The best performing neural network model used the low bid and second lowest bid as inputs.

The nature of bid ratios that can describe the pattern of bids submitted for a project and the relationship of the ratios to project outcomes were studied. The ratio values may be useful indicators of project outcome that can be used by construction managers.

This paper is an empirical analysis of first-price sealed-bid procurement auctions in Sweden, with and without combinatorial bidding. The data comprises procurement auctions of identical contracts (road resurfacing) with identical bidders conducted under the same time period (2009-2011) in two different regions in Sweden. Given the comparison of the suppliersʼ offered price per tons of asphalt, we cannot reject the hypothesis of identical distribution of standalone bids generated in both types of auction. The distribution of package bids within the combinatorial format is significantly lower than the distribution of standalone bids within the non-combinatorial format, suggesting substantial cost reduction of allowing package bidding. Also, within the combinatorial format, our analysis of data indicates higher costs when packages are predetermined by the purchaser rather than chosen freely by the suppliers.

Describes a novel Internet auction model achieving verifiable fairness, a requirement aimed at enhancing the trust of bidders in auctioneers. Distrust in remote auctioneers prevents bidders from participating in Internet auctioning. According to proposed survey reports, this study presents four characteristics that render the Internet untrustworthy for bidders. These intrinsic properties suggest that auction sites not only follow auction policies, but provide customers with evidence validating that the policies are applied fairly. Evidence of verifiable fairness provides bidders with a basis for confidence in Internet auctions. Cryptographic techniques are also applied herein to establish a novel auction model with evidence to manifest and verify every step of the auctioneer. Analysis results demonstrate that the proposed model satisfies various requirements regarding fairness and privacy. Moreover, in the proposed model, the losing bids remain sealed.

Discusses how a repetitive competitive bidding model, developed previously, can be adapted to the differing features of the situation. Focuses, first, on identifying the implications for decision analysis of the strategic nature of repetitive bidding and then on the impact of data to aid in winning a tender. Uses a real example from the construction industry which, for confidentiality reasons, is called Whernside Ltd. States the company is one operating a world‐wide spread of construction and development activities such as; civil engineering, private housing, property development, building, dredging, mining, mechanical engineering, foundation engineering and concrete products manufacture. Tabulates the company's turnover and profit in detail, and demonstrates that if bidding activity is to be continued, the formulation of a long‐term strategy must aim to set a perspective in the prescription of individual bids, so the long‐term accrued benefits are, in some sense, optimal. Documents the tactical bidding decision structure using figures by aid of explanation and goes into great detail by way of pinpointing the bid process. Concludes that from the discussion conclusions may be drawn and the three main ones paragraphed and spelt out with recommendations.

This study aims to solve optimal pricing and power bidding strategy problem for integrated combined heat and power (CHP) system by using a modified heuristic optimization algorithm.

In electricity markets, generation companies compete according to their bidding parameters; therefore, optimal pricing and bidding strategy are solved. Recently, CHP units are significantly operated by generation companies to meet power and heat, simultaneously.

For validation, it is shown that profit is improved by 0.04%–48.02% for single and 0.02%–31.30% for double-sided auctions. As heat price curve is extracted, the simulation results show that when CHP system is integrated with other units results in profit increase and emission decrease by 3.04%–3.18% and 2.23%–4.13%, respectively. Also, CHP units significantly affect bidding parameters.

The novelties are pricing and bidding strategy of integrated CHP system is solved; local heat selling is considered in pricing and bidding strategy problem and heat price curve is extracted; the effects of CHP utilization on bidding parameters are investigated; a modified heuristic and deterministic optimization algorithm is presented.