Bidding Decision Model Based on Prospect Theory and Game Theory

In the construction industry, most of the owners apply competitive bidding to award a contract to the lowest price qualified contractor. This study proposes a model concerning the preferences and the behaviors of all decision makers whom participation in an competitive bidding to assist contractors to make optimal bidding strategy decisions and set appropriate bidding prices. Researchers demonstrated model applicability using an actual case study, which shows how 'this model help the construction company's primary decision maker to determine the appropriate bidding price in a multi-competitors condition.