Information Feedback and Learning in Construction Bidding

Information feedback in recurrent construction bidding is an important variable in optimal procurement design. Contractors tend to optimize their bids in recurrent bidding with positive reviews of historic bids. Our experiment examines the effects of no and partial information feedback on the bidding trends of (inexperienced) student bidders', and the extent to which their bidding tends to agree with the behavioural patterns proposed by learning theory. The results show that the variations in bids over time for both information feedback levels are statistically significant. Although the bidders with partial bidding feedback are more likely to vary their bids as indicated by learning theory, their bids are less competitive than those with no bidding feedback information. Construction clients would need to consider the information feedback in their procurement of construction services to achieve efficiency in construction bidding.