The development of an online bidding game as a learning tool

David Cattell

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Abstract

Competitive bidding in construction involves high degrees of risk. The nature of the work involved is not certain: the contractor cannot accurately predict all of the factors that are involved such as the weather, soil conditions, labour rates, reliability of plant, the extent of wastage, and productivity. Whilst cost estimates are usually done deterministically, these uncertainties will give effect to some degree of unavoidable error in these estimates. Despite these risks, the mark-ups in this industry are typically relatively small. Given this environment, the lowest bids in any tender may be the cause of comparatively low costs (for reason of some competitive advantage), erroneously low estimates of these costs, low mark-ups, or a combination of these factors. As a result, contractors suffer the risk of the ¡°winner.s curse¡± which is otherwise known as a Pyrrhic victory. A contractor.s bid may be the lowest because they made an error underestimating their costs, causing them to win the tender but make a loss. An online Bidding Game is in development that will facilitate that students will be able to compete against each other in a safe, simulated environment. They will be able to test their skills at deciding strategies as regards selecting projects on which to compete and then decide bid prices that are sufficiently low for them to win and yet sufficiently high as to produce profits, given conditions that resemble the real world.
Original languageEnglish
Title of host publicationProceedings of the 36th Annual Conference for Australasian University Building Educators Association (AUBEA)
Place of PublicationBond University
PublisherAUBEA
Pages364-370
Number of pages7
Publication statusPublished - Apr 2011
Event36th Annual Conference for Australasian University Building Educators Association - Bond University, Gold Coast, Australia
Duration: 27 Apr 201129 Apr 2011
Conference number: 36th

Conference

Conference36th Annual Conference for Australasian University Building Educators Association
Abbreviated titleAUBEA
CountryAustralia
CityGold Coast
Period27/04/1129/04/11

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    Open Access
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