Bidding decision making in construction industry: An analysis based on procedural rationality

Through a literature review, we find that the bidding models based on rational theory have revealed little practical values by only taking into account of environmental constraints leaving bounded rationality neglected. This paper studies how bidders´ cognitive limitations will affect their decision process in the framework of bounded rationality and we find that the satisficing rule and the aspiration level play a critical role. Cognitive limitations require the focus on how bidding decisions are made, so we give a procedure to guide bidders to realize procedural rationality. To test the efficacy of this procedure, further empirical or experimental research is needed.