Bidding models: Testing the stationarity assumption

Skitmore, M; Runeson, G

Bidding models: Testing the stationarity assumption

Skitmore, M Runeson, G

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Publication Type:: Journal Article
Citation:: Construction Management and Economics, 2006, 24 (8), pp. 791 - 803
Issue Date:: 2006-08-01

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Field	Value	Language
dc.contributor.author	Skitmore, M	en_US
dc.contributor.author	Runeson, G	en_US
dc.date.issued	2006-08-01	en_US
dc.identifier.citation	Construction Management and Economics, 2006, 24 (8), pp. 791 - 803	en_US
dc.identifier.issn	0144-6193	en_US
dc.identifier.uri	http://hdl.handle.net/10453/4846
dc.description.abstract	With notably few exceptions, bidding models contain probability distributions with parameters that are assumed to be fixed, or stationary, over time. Some methods of testing the tenability of this assumption are examined and applied to eight datasets. Of particular interest is the statistical significance of two types of periodicity: (1) that bidders gradually reduce their bids prior to winning a contract; and (2) that bidders have periods in which they are more competitive and periods in which they are less competitive. To test (1), McCaffer and Pettitt's (1976) cusum method is used and shown to have a limited interpretation in this context. McCaffer's 'deficit' statistic is then used in conjunction with a one-way analysis of variance (ANOVA) and shows (1) to be untenable for the samples involved. To test (2), the deficit statistic is again used with an ANOVA to examine all possible sub-series of bids.	en_US
dc.relation.ispartof	Construction Management and Economics	en_US
dc.relation.isbasedon	10.1080/01446190600680432	en_US
dc.subject.classification	Building & Construction	en_US
dc.title	Bidding models: Testing the stationarity assumption	en_US
dc.type	Journal Article
utslib.citation.volume	8	en_US
utslib.citation.volume	24	en_US
utslib.for	1202 Building	en_US
utslib.for	09 Engineering	en_US
utslib.for	12 Built Environment and Design	en_US
utslib.for	14 Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/e-Press
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
utslib.copyright.status	closed_access
pubs.issue	8	en_US
pubs.publication-status	Published	en_US
pubs.volume	24	en_US

Abstract:

With notably few exceptions, bidding models contain probability distributions with parameters that are assumed to be fixed, or stationary, over time. Some methods of testing the tenability of this assumption are examined and applied to eight datasets. Of particular interest is the statistical significance of two types of periodicity: (1) that bidders gradually reduce their bids prior to winning a contract; and (2) that bidders have periods in which they are more competitive and periods in which they are less competitive. To test (1), McCaffer and Pettitt's (1976) cusum method is used and shown to have a limited interpretation in this context. McCaffer's 'deficit' statistic is then used in conjunction with a one-way analysis of variance (ANOVA) and shows (1) to be untenable for the samples involved. To test (2), the deficit statistic is again used with an ANOVA to examine all possible sub-series of bids.

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http://hdl.handle.net/10453/4846