A comparative analysis of the desired and actual bidding behaviour of construction companies

In the present paper, we quantify the desired and actual bidding behaviour of Japanese companies by analysing public procurement data from three regional development bureaus. Our study extends the findings of Iwamatsu et al. (2013), who use a survey questionnaire to determine the desired (but not the actual) bidding behaviour of major Japanese construction companies. To compare actual bidding behaviour with desired bidding, we model the probability of participation and the bidding ratio, both of which are regressed on the quantified values of the bidding data and other information. The results are then ranked, compared with those of Iwamatsu et al. (2013), and analysed. We focus on the factors on which firms concentrate when determining (i) whether they will participate in the bidding process and (ii) their pricing during bidding. Although both Iwamatsu et al. (2013) and our study include widely used high-ranking items, in our analysis, 'company circumstances' are highly ranked at the participation stage, while 'competition circumstances' are highly ranked at the pricing stage. This offers a practical justification for including competition circumstances when modelling real-world bidding behaviour.