Improving the estimation of probability of bidder participation in procurement auctions

Pablo Ballesteros-Pérez*, Martin Skitmore, Eugenio Pellicer, Jimmy H. Gutiérrez-Bahamondes

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

21 Citations (Scopus)

Abstract

Anticipating the number and identity of bidders has significant influence in many theoretical results of the auction itself and bidders' bidding behaviour. This is because when a bidder knows in advance which specific bidders are likely competitors, this knowledge gives a company a head start when setting the bid price. However, despite these competitive implications, most previous studies have focused almost entirely on forecasting the number of bidders and only a few authors have dealt with the identity dimension qualitatively. Using a case study with immediate real-life applications, this paper develops a method for estimating every potential bidder's probability of participating in a future auction as a function of the tender economic size removing the bias caused by the contract size opportunities distribution. This way, a bidder or auctioner will be able to estimate the likelihood of a specific group of key, previously identified bidders in a future tender.

Original languageEnglish
Pages (from-to)158-172
Number of pages15
JournalInternational Journal of Project Management
Volume34
Issue number2
DOIs
Publication statusPublished - 1 Feb 2016
Externally publishedYes

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