Asgari, S (2016) Modeling construction competitive bidding: An agent-based approach. PhD thesis, Columbia University, USA.
Abstract
The construction industry is a complex, multi-level system that includes a large collection of independent, heterogeneous organizations and institutions and is associated with several economic sectors and markets. Because of its unique characteristics, the construction industry as one of the major economic sectors and contributors to the economic development of the nation needs its own specific and dedicated economics. The shortcomings of the existing methodologies call for the use of more sophisticated modeling tools that can capture more important aspects of the real world and its complexity in particular the interconnections among elements of the system, their idiosyncrasies, and emergent behavior. As a pioneer attempt in the exploration of a new theory of construction economics, this study aims to found the first building blocks of the comprehensive economic model of the construction industry. In this dissertation, an agent-based approach is applied to model the low-bid lump-sum construction competitive bidding by which most construction works are allocated. This model has several advantages over the previous analytical and empirical models including the capability of observing the bidding process dynamics, the interaction between the heterogeneous and learning agents, and the emergent bidding patterns arising from multiple scenarios of market conditions and contractors’ attributes. Then the model is used as a virtual laboratory for conducting a variety of experiments to answer several important research questions in the field of construction economics. The main research objectives of this study are to: (1) analyze the effectiveness of major quantitative methods in the bidding environment under a variety of market conditions (2) study the effect of contractors’ risk behavior, cost estimating and project management skills, and complexity of projects on contractors’ choice of optimal markup, long-term financial growth and market share (3) investigate the impact of risk behavior and need for work on contractors’ performance. The results presented in this dissertation offer new understandings and insights on the construction bidding environment and recommendations for both owners and contractors’ competitive success, which are not available using conventional approaches. In particular, results suggest that (1) using Friedman model can result in considerably higher market share whereas using Gates model can result in higher profit per project, (2) the optimal policy for contractors is moderation in both dimensions of risk attitude and need for work, (3) the comparative performance of slightly and extremely risk averse contractors are depending on level of cost estimating accuracy and project execution skills of contractors as well as the level of project complexities.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Odeh, I |
| Uncontrolled Keywords: | accuracy; complexity; construction economics; economic development; effectiveness; market; market condition; skills; bidding; estimating; learning; markets; policy; owner; experiment |
| Index terms: | markets, modelling, risk behaviour, competitive bidding, construction economics, dynamics, quantitative method, profit, experiment, economic model, estimating, exploration, construction work, accuracy, dissertation, market condition, project management, construction industry, effectiveness, complexity, project complexity, agent, owner, dimension, bidding, laboratory, risk attitude, interaction, market share, economic development, cost estimating, methodology |
| Subjects: | industry analysis, economic analysis, practitioner, sociology, economic development, decision-making and reasoning, financial analysis, bidding, market analysis, research dissemination and communication, organizational theory, environmental resource management, behavioral psychology, financial and cost management, modelling and simulation, health monitoring assessment and metrics, research methods, research management, analytical methods, economic and policy analysis, systems engineering, data analysis and analytics, performance management, project management theory and practice, professional development, data collection methods, operations management |
| Topics: | Research Practice, Quality Management, Project Management, Health and Safety, Sustainability, Stakeholder Management, Engineering Principles, Procurement, Information Management, Cost Management, Roles and Professions, Business Strategy |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here