Does Multi-Attribute Bidding in Public Construction Projects Prevent Corruption while Tenderers’ Preferences are Open? A Study of China’s Practice

Abstract

This paper establishes a method of supply-chain multi-attribute reverse auction. Presuming the tenderers' preference is open, the paper proposes a non-cooperative multi-attribute bidding game model about public construction projects and analyzes the bidding strategies of tenderers and bidders. Through the simulation of a case in China, we find that: (1) the more committed of the tenderers to construction quality and schedule, the greater benefits, enthusiasm in bidding, and tenderer's surplus; (2) the bidder's benefits have a U-shaped relationship respectively with the bidding quality and the construction period; and (3) the greater the bidder's construction quality and period cost coefficients, the smaller the tenderer's surplus. Such conclusions indicate, the improvement of the bidding rules or procedures can contribute to restricting the behavior of tenderer and bidder, furthermore reducing the corruption possibility of public construction projects.

An Evolutionary Game Study of the Behavioral Management of Bid Evaluations in Reserve Auctions

“…Then, a novel Vickrey-based reserve auction with multiple attributes was proposed based on the classification above, and it was successfully applied in supply chain management. Combined with Chinese practice, He et al [11] proposed a multiattribute reserve auction for public construction plans. Zhang et al [12] initially proposed a multiattribute auction that was applied in transportation purchasing.…”

“…In a sealed-bid environment, Kamiji [28] analyzed different kinds of bidding behaviors between online search engines and business advertisers, and he then performed a simulation to illustrate that interests could be gained if they changed bidding strategies. He et al [11] analyzed the chosen strategy of the bidder and tenderer within the bid procedure under the assumption that the tenderer's preference was open. They found that the bidder would place more attention on bidding strategy improvement rather than corruption behavior if there was more transparency within procurement.…”