Abstracts – Browse Results
Click on the titles below to expand the information about each abstract.
Viewing 30 results ...
Abdallah, M, El-Rayes, K and Liu, L (2016) Minimizing Upgrade Cost to Achieve LEED Certification for Existing Buildings. Journal of Construction Engineering and Management, 142(02).
Ahmed, M O, El-adaway, I H, Coatney, K T and Eid, M S (2016) Construction Bidding and the Winner’s Curse: Game Theory Approach. Journal of Construction Engineering and Management, 142(02).
- Type: Journal Article
- Keywords: Contracting;
- ISBN/ISSN: 0733-9364
- URL: https://doi.org/10.1061/(ASCE)CO.1943-7862.0001058
- Abstract:
In the construction industry, competitive bidding has long been used as a method for contractor selection. Because the true cost of construction is not known until the completion of the project, adverse selection is a major concern. Adverse selection is when the winner of the contract has underestimated the project’s true cost. Thus, the winning contractor will most likely earn negative or at least below normal profits. The winner’s curse is when the winning bidder submits an underestimated bid and is thus cursed by being selected to undertake the project. In the multistage bidding environment, where subcontractors are hired by a general contractor, the winner’s curse may be compounded. In general, contractors suffer from the winner’s curse for a variety of reasons including inaccurate estimates of project cost; new contractors entering the construction market; minimizing losses in case of recession of the construction industry; strong competition within the construction market; differential opportunity costs, which can affect the behavior of contractors; and the intention to win the project and then remedy the losses through change orders, claims, and other mechanisms. Using a game theory approach, this paper aims to analyze—and potentially reduce—industry exposure to the effects of the winner’s curse in construction bidding. To this end, the authors identify the degree of the winner’s curse in two common construction bidding environments; namely, single-stage bidding and multistage bidding. The objective is to compare the aforementioned two construction bidding environments and determine how learning from past bidding decisions and experiences can mitigate the winner’s curse. To this end, and through defining the relationship between the construction bidding and auction theory, the authors utilized a three-step research methodology that involved (1) presenting the symmetric risk neutral Nash equilibrium (SRNNE) as an optimal bid function; (2) developing simulation models for single and multistage construction bidding processes; and (3) analyzing the results of the simulation models, which is based on an actual dataset of projects provided by the California Department of Transportation. This research demonstrated that the majority of general contractors and subcontractors suffer from the winner’s curse in both single-stage and multistage bidding environments. Moreover, from a winner’s curse perspective, the multistage bidding environment incurs more losses than the single-stage bidding environment. However, through learning from past experiences, the multistage bidding environment provides contractors with a better opportunity to avoid the winner’s curse if compared with the single-stage bidding environment. This research should be beneficial for the profession to better understand the bidding decision-making processes. For future work, cooperative game theory can be applied with the integrated project delivery principles to help all associated parties mutually achieve their project objectives.
Aljassmi, H, Han, S and Davis, S (2016) Analysis of the Complex Mechanisms of Defect Generation in Construction Projects. Journal of Construction Engineering and Management, 142(02).
AlMaian, R Y, Needy, K L, Walsh, K D and Alves, T d C L (2016) A qualitative data analysis for supplier quality-management practices for engineer-procure-construct projects. Journal of Construction Engineering and Management, 142(02), 04015061.
Arroyo, P, Tommelein, I D and Ballard, G (2016) Selecting Globally Sustainable Materials: A Case Study Using Choosing by Advantages. Journal of Construction Engineering and Management, 142(02).
Austin, R B, Pishdad-Bozorgi, P and de la Garza, J M (2016) Identifying and Prioritizing Best Practices to Achieve Flash Track Projects. Journal of Construction Engineering and Management, 142(02).
Baqerin, M H, Shafahi, Y and Kashani, H (2016) Application of Weibull Analysis to Evaluate and Forecast Schedule Performance in Repetitive Projects. Journal of Construction Engineering and Management, 142(02).
Chen, Q, Jin, Z, Xia, B, Wu, P and Skitmore, M (2016) Time and Cost Performance of Design–Build Projects. Journal of Construction Engineering and Management, 142(02).
Chiang, Y H, Li, V J, Zhou, L, Wong, F and Lam, P (2016) Evaluating Sustainable Building-Maintenance Projects: Balancing Economic, Social, and Environmental Impacts in the Case of Hong Kong. Journal of Construction Engineering and Management, 142(02).
Choi, K, Lee, H W, Mao, Z, Lavy, S and Ryoo, B Y (2016) Environmental, Economic, and Social Implications of Highway Concrete Rehabilitation Alternatives. Journal of Construction Engineering and Management, 142(02).
Dang, T and Bargstädt, H (2016) 4D Relationships: The Missing Link in 4D Scheduling. Journal of Construction Engineering and Management, 142(02).
De Marco, A, Rafele, C and Thaheem, M J (2016) Dynamic Management of Risk Contingency in Complex Design-Build Projects. Journal of Construction Engineering and Management, 142(02).
Hasan, A and Jha, K N (2016) Acceptance of the Incentive/Disincentive Contracting Strategy in Developing Construction Markets: Empirical Study from India. Journal of Construction Engineering and Management, 142(02).
He, W, Tang, W, Wei, Y, Duffield, C F and Lei, Z (2016) Evaluation of Cooperation during Project Delivery: Empirical Study on the Hydropower Industry in Southwest China. Journal of Construction Engineering and Management, 142(02).
Hyari, K H (2016) Handling Unbalanced Bidding in Construction Projects: Prevention Rather Than Detection. Journal of Construction Engineering and Management, 142(02).
Jarkas, A M (2016) Effect of Buildability on Labor Productivity: A Practical Quantification Approach. Journal of Construction Engineering and Management, 142(02).
Jiang, H, Lin, P and Qiang, M (2016) Public-Opinion Sentiment Analysis for Large Hydro Projects. Journal of Construction Engineering and Management, 142(02).
Jin, R, Han, S, Hyun, C and Cha, Y (2016) Application of Case-Based Reasoning for Estimating Preliminary Duration of Building Projects. Journal of Construction Engineering and Management, 142(02).
Kim, T, Lee, H W and Hong, S (2016) Value Engineering for Roadway Expansion Project over Deep Thick Soft Soils. Journal of Construction Engineering and Management, 142(02).
Leung, M, Yu, J and Chong, M L A (2016) Effects of Stress and Commitment on the Performance of Construction Estimation Participants in Hong Kong. Journal of Construction Engineering and Management, 142(02).
Lim, T, Park, S, Lee, H and Lee, D (2016) Artificial Neural Network–Based Slip-Trip Classifier Using Smart Sensor for Construction Workplace. Journal of Construction Engineering and Management, 142(02).
Lines, B C, Sullivan, K T and Wiezel, A (2016) Support for Organizational Change: Change-Readiness Outcomes among AEC Project Teams. Journal of Construction Engineering and Management, 142(02).
Liu, Y and Yeh, I (2016) Building Valuation Model of Enterprise Values for Construction Enterprise with Quantile Neural Networks. Journal of Construction Engineering and Management, 142(02).
Oh, E H, Naderpajouh, N, Hastak, M and Gokhale, S (2016) Integration of the Construction Knowledge and Expertise in Front-End Planning. Journal of Construction Engineering and Management, 142(02).
Rafiei, M H and Adeli, H (2016) A Novel Machine Learning Model for Estimation of Sale Prices of Real Estate Units. Journal of Construction Engineering and Management, 142(02).
Said, H (2016) Modeling and Likelihood Prediction of Prefabrication Feasibility for Electrical Construction Firms. Journal of Construction Engineering and Management, 142(02).
Seyis, S, Ergen, E and Pizzi, E (2016) Identification of Waste Types and Their Root Causes in Green-Building Project Delivery Process. Journal of Construction Engineering and Management, 142(02).
Shokri, S, Ahn, S, Lee, S, Haas, C T and Haas, R C G (2016) Current Status of Interface Management in Construction: Drivers and Effects of Systematic Interface Management. Journal of Construction Engineering and Management, 142(02).
Shokri, S, Haas, C T, G. Haas, R C and Lee, S H (2016) Interface-Management Process for Managing Risks in Complex Capital Projects. Journal of Construction Engineering and Management, 142(02).
Tymvios, N and Gambatese, J A (2016) Perceptions about Design for Construction Worker Safety: Viewpoints from Contractors, Designers, and University Facility Owners. Journal of Construction Engineering and Management, 142(02).