Showing papers on "Bidding published in 1972"

Competitive Bidding: The Probability of Winning

Abstract: Current competitive bidding strategy models are reviewed critically with emphasis placed on similarities and differences between methods of valuating projects and between methods used to assess the probabilities of winning with different bids. A contractor's 3-yr bidding experience is analyzed. It is shown that a contractor does not, in general, have data of sufficient quantity and quality needed to use current bidding models. The validity of the use of classical single variable statistical analysis procedures is questioned.

Bidding Models: Resolution of a Controversey

Abstract: The material presented herein offers a resolution of the controversy over the Friedman and Gates bidding models. Both have been shown to be correct in their own way, Friedman's model as a tool to determine an optimum bid, and Gates' model as a description of the results of bidding competitions.

Why 2,310,000 [pounds] for a Velazquez?: An Auction Bidding Rule

Abstract: In November 1970, Velazquez's Portrait of Juan Pareja was sold at auction in London by Christie's for ?2,310,000. This record figure for a Velazquez is equal to 2.2 million guineas (1 guinea 1.05 pounds)bidding for paintings at Christie's is always in terms of guineas. The underbidder had bid 2.1 million guineas. Thus the final increment bid was 100,000 guineas, that is, just under 5 percent of the preceding bid. In June 1971, Titian's Diana and Actaeon was sold at Christie's for 1.6 million guineas (?1,680,000), a record price for a Titian. The underbidder had bid 1.5 million guineas. Thus the final increment bid was 100,000 guineas, that is, somewhat above 5 percent of the preceding bid. The particular size of the final increments bid in these two cases was no accident. It reflects the operation of a rule or condition (which is, however, waived on occasion) that at Christie's auctions bidding has to advance in steps no smaller than 5 percent of the reigning bid. In practice, for convenience, the minimum increments are rounded off to form a pattern of conventional \"steps\" which are known to dealers and other regular followers of auctions. The conventional 100,000-guinea increment for sums above 1.5 million guineas is illustrated in our two examples.' The rule governing minimum bidding increments or advances appears to produce satisfactory results both for auctioneer and for clients. There is competition among auctioneers; other rules governing bidding increments are possible; and Sotheby's, the leading London competitor of Christie's, has a rule similar to Christie's. What is the rationale of a rule requiring the minimum increment or advance at an auction to be a fixed proportion of the ruling bid? This note explores the question without pretending to come up with a conclusive answer. Its more modest purpose is to examine a number of possible explanations and to suggest, incidentally, that auctions and their rules of conduct are an interesting field of economic study. We first set aside the possibility that the auctioneer may on occasion waive the rule and accept lower increments than the normal. Some ob-

Sequential bid selection by stochastic approximation

Abstract: Suppose that a contractor is faced with a sequence of “minimum bid wins contract” competitions. Assuming that a contractor knows his cost to fulfill the contract at each competition and that competitors are merely informed whether or not they have won, bids may be selected sequentially via a tailored stochastic approximation procedure. The efficacy of this approach in certain bidding environments is investigated.

Toward optimal bidding strategies

Abstract: In this paper we investigate a form of rational behavior in response to an oligopoly pricing problem where only one buyer is involved. We investigate the problem from the standpoint of the seller who wants to maximize his gain from the transaction. In particular, we deal with the problem of one seller's response to an invitation to submit a sealed (i. e., noncooperative) bid to a government or other dominant purchasing agency for supplying a specified bundle of goods and services for which either (1) no other demand exists, or (2) the terms or quantities involved cannot, at least in the short run, be obtained from another source. Although treated from a normative standpoint, i. e., what bid the supplier should make, the paper also has implications for the buyer's behavior and oligopoly-monopsony pricing in a more general sense.

Aid to India: I

Abstract: An important distinction is that between project aid and non-project aid. The former is a specific sum of money which is intended to cover the foreign exchange cost of an identifiable project within the total aid allocation. Such aid need not cover the whole foreign exchange component of the project, though it normally does. Donors provide aid to the Government of India, which makes the funds available, on its own terms, to the authority responsible for the project. Conditions may be attached by the donor to consultancy, supervision, bidding for contracts, shipping arrangements, etc. These ‘strings’ are of a different nature from the more general ‘conditions’ relating to performance in the economy at large, although they too can give rise to disagreements between donors and recipients.

Bridge bidding indicator

Abstract: A bridge bidding indicator having a plurality of magnetically attractable instruction cards each of which includes an apertured information field representative of a bridge hand of particular evaluation, and a bidding instruction corresponding to such evaluation. The instruction card deck is placed in a box housing having a hinged closure member, and pegs are selectively inserted through one face of the housing into the apertured information fields to represent a particular hand evaluation and to retain all but the appropriate instruction card. The chosen card is removed from the deck by opening the closure member, a portion of which is magnetized and engages the deck when closed.