Some Multi-Contract Decision-Theoretic Competitive Bidding Models

Abstract

This paper reviews the principal public literature concerned with expected-profit decision-theoretic closed-competitive-bidding models. It makes extensions of previous formulations for static multi-contract bidding situations with and without cost dependencies and resource constraints. The same decision model is reformulated to utilize numerical, Lagrange-multiplier, dynamic, and integer linear programming techniques according to the information available to the bidder. A zero-one integer programming formulation is well suited to utilize subjective probabilities of winning estimates. Finally, the paper suggests a format for further development.