Comparative analysis of quantitative bidding methods using agent-based modelling

ABSTRACT Competitive bidding is the main mechanism for the allocation and price determination of construction services in the Architecture, Engineering, and Construction industry. Quantitative bidding methods have received considerable attention in the literature. The validity and reliability of these methods (particularly Freidman and Gates) have been explored using mathematical and statistical analysis. This study aims to compare and examine the characteristics of major quantitative bidding methods under different market scenarios using an agent-based approach as a computational laboratory. The results indicate that using the Friedman model can result in obtaining higher market share and working capital whereas using the Gates model can result in gaining higher profitability in the long run. Finally, the simulation model is verified by breaking down the model into several computation steps and validated using sensitivity analysis, robustness analysis, and structural validation.