Gates' Bidding Model—A Monte Carlo Experiment

by Marvin Gates, (M.ASCE), Pres.; Construction Estimating, Inc., West Hartford, Conn.; and Lect., Worcester Polytechnic Inst., Worcester, Mass.,


Serial Information: Journal of the Construction Division, 1976, Vol. 102, Issue 4, Pg. 669-680


Document Type: Journal Paper

Abstract: 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.

Subject Headings: Bids | Monte Carlo method | Model tests | Probability | Simulation models | Dispute resolution | Europe | Monaco | Monte Carlo

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