GATES' BIDDING MODEL--A MONTE CARLO EXPERIMENT

The probability of winning in a closed competitive bidding situation has been vigorously disputed for ten years. In particular, the basic probability model of simultaneously beating more than one competitor, when the probability of beating each competitor alone is known, is in contention. Two fundamental probability models, Friedman's and Gate's, have been proposed and yield conflicting results. The supporters of one are generally the detractors of the other. A manual Monte Carlo simulation was used to test both models. In all, six different experiments were run three times and 48 test results were compared. Friedman's model failed while Gates' model passed every test. These results challenge the credibility of other bidding models that are widely published in reference books; usually by the authors of the model.

• Corporate Authors:

  American Society of Civil Engineers

  345 East 47th Street
  New York, NY  United States  10017-2398
• Authors:
  • Gates, M
• Publication Date: 1976-12

Media Info

• Features: Appendices; References; Tables;
• Pagination: p. 669-680
• Serial:
  • Journal of the Construction Division
  • Volume: 102
  • Issue Number: C04

Subject/Index Terms

• TRT Terms: Competitive bidding; Construction industry; Mathematical models; Monte Carlo method; Probability theory
• Subject Areas: Construction; Data and Information Technology; Highways;

Filing Info

• Accession Number: 00148677
• Record Type: Publication
• Files: TRIS
• Created Date: Mar 15 1977 12:00AM