Tendering theory revisited

Goran Runeson and Martin Skitmore

Construction Management and Economics, 1999, vol. 17, issue 3, 285-296

Abstract: This paper discusses the content, origin and development of tendering theory as a theory of price determination. It demonstrates how tendering theory determines prices and how it is different from game and decision theories, and that in the tendering process, with non-cooperative, simultaneous, single sealed bids with individual private valuations, extensive public information, a large number of bidders and a long sequence of tendering occasions, there develops a competitive equilibrium. The development of a competitive equilibrium means that the concept of the tender as the sum of a valuation and a strategy, which is at the core of tendering theory, cannot be supported, and that there are serious empirical, theoretical and methodological inconsistencies in the theory.

Keywords: Tendering Theory; Tendering; Price Determination; Bidding (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (4)

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DOI: 10.1080/014461999371493

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