A theoretical framework for determining the minimum number of bidders in construction bidding competitions

Stephen Ngai, Derek Drew, H. P. Lo and Martin Skitmore

Construction Management and Economics, 2002, vol. 20, issue 6, 473-482

Abstract: A theoretical framework is proposed for determining the minimum number of bidders in competition for projects in the construction industry. This is based on the neo-classical micro-economic theory for price determination in construction and the assumption of random contractor-selection. Empirical analysis of the Hong Kong data set not only illustrates the applicability of the framework, but also supports the relevance of the microeconomic model for construction price determination. The main implication for clients is that, in order to obtain the most competitive bids for projects in the most cost-efficient way, they should vary the minimum number of bidders in competition according to market conditions.

Keywords: Construction Price Determination; Tendering Theory; Construction Economics; Number Of Bidders (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (3)

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DOI: 10.1080/01446190210151041

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