A comparison of contractors' decision to bid behaviour according to different market environments

Contractors' decision to bid behaviour in public sector contracting is compared in two different construction markets (i.e. Hong Kong and Singapore) according to two extreme market conditions scenarios (i.e. booming and recession) and different number of bidders scenarios (ranging from 4 to 30). Multiple bid/no-bid decisions were collected in two rounds via a designed bidding experiment involving managers of medium to large contractors based in Hong Kong and Singapore. A logit model is developed for modelling the probability of a contractor's decision to bid in response to the two extreme market conditions scenarios. The results show that Hong Kong contractors are more influenced by market conditions in their decision to bid than Singapore contractors and this influence is independent of the intensity of competition. The odds of a decision to bid in Hong Kong are four times higher in recession than in booming times whereas in Singapore this is only two times. Both Hong Kong and Singapore contractors' decision to bid decreases as the number of bidders increases. © 2007 Elsevier Ltd and IPMA.