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In many countries that allow unsolicited proposals (USPs) for public–private partnership (PPP) projects, incentives are awarded to the initial proponent of the USP projects during the tendering process as rewards for initially making a proposal. Because of such a reward system, including the bonus system, USPs are commonly known to involve fewer tender participants. This paper aims to investigate the empirical relationship between the number of tender participants and the institutional factors of PPPs. Specifically, two institutional factors are examined: the use of USPs and the bonus system for initial USP proponents.

The ordinary least squares (OLS) and Poisson regression analysis is used in this study to analyze PPP data in South Korea.

This paper demonstrated that USP projects have fewer bidders participating in tenders than solicited projects. Meanwhile, the analysis showed that the bonus system as another component of the institutional framework did not account for the number of bidders in tendering. In the analysis by three different facility types (“Roads,” “Environmental facilities” and “Other” types) of whether the bonus system discouraged participation in the bidding, the authors found heterogeneous responses among the types. For “Roads” and “Other” types of projects, the existence of the bonus system reduced the number of bidders for USP projects, while for “Environmental facilities,” there was no negative relationship between bonus points and the number of bidders. In the analysis of whether there were fewer bidders when no bonus points were awarded, there was no statistically significant difference in the number of bidders for “Roads” and “Environmental facilities.”

This study shows the possibility that other institutional factors apart from bonus points affect competition. The characteristic factors of USPs can affect the decision to participate in the tender from the perspective of potential bidders.

Recent studies on USPs have mainly focused on the strategies that ensure the effective management of USPs for PPP implementation. However, quantitative effects of USPs on the tendering process have not yet been addressed. The quantitative effect refers to something that may be estimated by quantity or that relates to the describing or measuring of quantity, such as the present attempt to account for the number of bidders.

The purpose of this paper is to test the hypothesis that relative to a cash acquisition, a stock acquisition would increase the bidder’s investor base and lower Merton’s (1987) shadow cost, which in turn contributes positively to the bidder announcement return.

Using the number of registered shareholders and measures of institutional ownership as the proxies for investor base and investor recognition, this paper compares their changes and the changes in shadow cost between bidders using different methods of payment. The authors examine the relation between the shadow cost reduction and bidder announcement return in a multivariate framework.

This paper finds that given the target type, bidders using stocks experience significantly larger increases in their investor bases and investor recognition than bidders using cash. Additionally, only bidders using stocks experience significant decreases in their shadow costs. In a multivariate framework, the change in the shadow cost has a negative and significant effect on the bidder announcement return in the sample of stock acquisitions and the subsample of bidders using stocks to acquire private targets. These findings support the authors’ hypothesis and suggest that the less established bidders acquiring private targets in particular benefit from the shadow cost reduction.

This paper provides the direct evidence that investor recognition matters in mergers and acquisitions. The findings also provide a complementary explanation for the documented positive bidder returns when bidders use stocks to acquire private targets.

This paper aims to investigate how competition among online auction sellers influences the setting of both open and secret reserve prices, thereby affecting auction outcome.

Using a data set collected from eBay consisting of 787 identical product auctions, three empirical models have been proposed. Model 1 simultaneously estimates the effects of auction competition on a seller’s own open and secret reserve price strategies; Model 2 estimates the effects of auction competition on bidder participation; and Model 3 estimates the direct and indirect effects of auction competition on selling price.

Competition among sellers is central to shaping sellers’ reserve price strategies. When there are more concurrent auctions for identical items, sellers tend to specify a low open reserve and are less likely to set a secret reserve. Sellers are strongly influenced by competitors’ reserve price strategies, and tend to follow competition. Finally, auction competition and competitive reserve price strategies influence both bidder entry and selling prices.

This study has important implications for both sellers and bidders. It highlights the importance for sellers to adapt their reserve price strategies in light of their competitors’ reserve price strategies and offers implications for bidders regarding auction selection. An auction with low starting bid does not necessarily lead to a lower selling price as it attracts more bidders.

This paper focuses on competition among auction sellers, whereas previous literature has focused on competition among bidders. This paper is the first to study the impact of competing reserve prices in auctions.

This paper aims to empirically test the effect of list price and bidding strategies in ascending auctions of residential real estate.

Three regression models are estimated, using a unique data set from 629 condominium apartments in the inner-city of Stockholm, Sweden, sold between January 2010 and December 2011.

The results show that jump bidding has the predicted effect of reducing competition by scaring off bidders. However, a higher average bid increment leads to a higher selling price. Furthermore, results show that a fast auction in terms of average time between bids acts to increase the probability of so-called auction fever as both the number of bidders and the selling price are positively correlated with the speed of the auction. While the average behavior of all auction participants, in terms of jump bidding and time between bids, significantly affects auction outcomes, differences in strategies applied by winners and losers show mixed results. The results of this study with respect to sellers’ list price strategy show that underpricing is an ineffective strategy in terms of enticing more bidders to participate in the auction. Furthermore, underpricing is not sufficient to have a positive effect on the selling price.

This paper is one of the first papers to empirically analyze how different bidding strategies affect the outcome of residential real estate auctions in terms of competition and the final selling price.

This research aimed at identifying the most significant risks relevant to construction contracts of two power station projects in Egypt. These were large scale, fast‐track projects where a multi‐package contracting plan was utilized. Further, the study investigated how risks were perceived and managed by a large sample of Egyptian and international contractors who participated in the execution of these two major projects. A checklist of risk categories was developed to aid contractors in their risk identification effort. The compilation of this checklist identified the following risk categories: 1) owner’s obligations; 2) interface with other contractors; 3) liability risks; 4) financial risks; 5) risks related to changes; 6) technical risks and 7) consortium risks. Research results identified a marked lack of consistency in the contractors’ risk identification effort. Contractors possessing past experience in Egypt were far better able to identify the relevant risks. On the other hand, local Egyptian contractors with vast experience in Egypt but limited project management experience were shown to lack the necessary expertise to properly identify risks and to take the appropriate exceptions. Furthermore, the results revealed that bidders do not include in their proposals their “true” lists of exceptions which represent genuine risks to them.

This paper gives a model of collusion formation and a method of measuring the degree of it among the traders/bidders in the agricultural commodity markets in India. The important assumption is that the bidding is repetitive with a set of common bidders. The theory has been derived based on the behavior of the wholesale market of agricultural commodities in India. The paper is based on full information in the collusion formation. The paper first derives the theoretical structure of the bidders' behavior and thereafter derives a measure of collusion formation with the help of real-life data.

The paper used the standard theory of optimization and the theory of auction and probability statistics.

This is a complete information model of cartel formation. The bidding is repetitive and continues forever in discrete time. Hence bidders behavior is observable. Using the proposed method, if the APMC measures for each market and publishes on a periodic basis, say weekly basis, then it will be easier to break the collusion in the market where relative collision is present. For example, if a farmer has three options to sell in three different markets, then the published data would help them to select the market where the degree of collusion is relatively lower. Moreover, the undesirable loss can be avoided based on the right choice of market. As a result, transaction costs will be optima.

The paper first derives the theoretical structure of the bidders' behavior and thereafter derives a measure of collusion formation with the help of real-life data.

This research aims to contrast bid competitiveness with respect to the average bid auction (ABA) and the non-ABA bidding formats used by the Public Works Department (PWD) of Malaysia.

The research uses the ordinary least square regression and the Monte–Carlo simulation to point out significant predictors which affect the bid ratio and fitting probability distributions to bidding data, respectively.

This research shows that the bidding strategy adopted is dependent on the different formats used. In the ABA format, bidders are more likely to submit identical bid prices. In the non-ABA format, they bid according to the first-price auction strategy, which suggests greater variation between bid prices as a winning strategy and the reduction in the bid price to an estimated price ratio when more bidders bid.

Bidders lose more money when the distance between the project location and a firm’s operational office is greater. Best-fit probability density functions follow a gamma distribution for the ABA format and a Weibull distribution for the non-ABA format. The location and number of bidders affect bidders’ strategy to win.

This research presents empirical insights concerning the comparisons of different type of bidding formats practiced by PWD of Malaysia and its implications on the construction companies’ bidding behaviors especially when it comes to its economic consequences. The significant factors that affect the different auction mechanisms used can serve as a basis for improving the present methods employed by PWD and in other countries.

The purpose of this paper is to present an experiment to test the effect of construction demand on the mark-up price level in construction contract auctions.

An experimental approach was adopted for this study. In a controlled laboratory environment, a first-price sealed bid auction was simulated with varying number of projects available over ten rounds to simulate changing construction demand. Two experimental treatments were run in parallel, one exhibiting a “booming” demand over time, and the other group with a “recession” scenario. The experiment involved student (inexperienced) bidders with a construction project management background.

The results show that inexperienced bidders do behave differently when subjected to varying levels of construction demand. Variations in the bid price level are affected by varying levels of construction demand and the general mark-up level for the bidders experiencing a booming scenario was higher on average compared to bidders subjected to the recession scenario.

An identified limitation of this study is the use of student subjects in the experiment, thus the experiment results are limited in generalisation to inexperienced bidders. Further studies may be able to replicate the experiment with experienced industry practitioners to observe the results.

The results allow for industry practitioners to gain a stronger understanding of the effects of varying levels of construction demand and the need to consider construction demand in construction contracting. For construction clients, the level of construction demand may be used as an indicator to assist in the timing to call tenders to achieve a desirable price. For contractors, increased awareness of how demand affects competition and the price level will allow additional optimisations to be achieved in the bid price.

Construction demand has been widely known to be one of the key factors affecting contractors’ bidding decisions. However, there has been little empirical investigation of the changes in bidders’ behaviour due to varying levels of construction demand. This paper attempts to add to the empirical research knowledgebase through an experimental setting.

We compare allocation rules in uniform price divisible-good auctions. Theoretically, a “standard allocation rule (STANDARD)” and a “uniform allocation rule (UNIFORM)” admit different types of low-price equilibria, which are eliminated by a “hybrid allocation rule (HYBRID).” We use a controlled laboratory experiment to compare the empirical performances of these allocation rules.

We conduct three-bidder uniform price divisible-good auctions varying the different allocation rules (standard, uniform, or hybrid) and whether or not explicit communication between bidders is allowed. For the case where explicit communication is allowed we also study six-bidder auctions.

We find that prices are similar across allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate. With explicit communication, prices are collusive, and we observe collusive prices even when collusive agreements are broken. Collusive agreements are particularly fragile when the gain from a unilateral deviation is larger, and an implication of this is that collusive agreements are more robust under STANDARD.

We do not find conclusive evidence of differences in performance among allocation rules. However, there is suggestive evidence that STANDARD may be more vulnerable to collusion.

Divisible-good uniform price auctions are used in financial markets, but it is not possible to use naturally occurring data to test how alternatives to the standard format would perform. Using laboratory methods we provide an initial test of alternative allocation rules.

The quality of consulting services informing project decisions is crucial for the effectiveness of public investments. We analyze the ability of the consulting industry to provide adequate services to government agencies in Italy. At the aggregate level we observe that the value of the public demand for consulting services is a small and highly variable share of revenues of the consulting firms. At the micro level, we analyze the procurement data for some 300 feasibility studies. Although the market for those studies has been reasonably competitive, it has attracted a small fraction of the all consulting sector, and the quality of the studies has been unsatisfactory. We claim that an increasing public demand would provide more incentives for firms to focus their business on the provision of quality consulting services to the public sector.