On the external validity of construction bidding experiment

Abstract

The external validity of experimental studies and in particular, the subject pool effects have been much debated among researchers. The common objections are that the use of student as experimental subjects is invalid as they are likely to be unrepresentative. This paper addresses this methodological aspect in building economics research. It compares the bidding behavioural patterns of experienced construction executives (professionals) and student subjects through replication of a bidding experiment that aimed at testing theories. The results show that the student subjects’ bidding behavourial patterns, in terms of decision to bid and mark-up decision, are sufficiently similar to that of the professionals. This suggests that the subject pool per se is not a threat to the external validity of the bidding experiment. In addition, the demonstrated practicality of an experimental approach in testing theories should lead to more use of experimental studies with student subjects in building economics research. It is suggested that experimental and field findings should be seen as complementary in building economics research, as advocated in social sciences.

Release of Construction Clients’ Pre-tender Cost Estimates: An Experimental Study

“…The subjects submitted rationale bids that support the use student subjects in similar studies testing theories as advocated in Oo (2016). Together with the groups of experimental studies on information feedback in construction bidding that used student subjects as highlighted in the above review, the robust findings in this study should lead to more confidence in the use of experimental approaches in building economics research.…”

“…These findings provide evidence on the robustness of experimental results in building economics research that used student subjects, and similarly in this study where student subjects were used. Although Oo's (2016) study is the only study hitherto that examined external validity of experimental studies in building economics research, this problem has been much debated in the social sciences of which building economics and construction bidding research are parts. In defending the external validity of experimental studies, many authors have concluded that field and laboratory results are highly complementary, and that both are important to the progress of knowledge in social sciences (e.g., Levitt and List 2007, Falk and Heckman 2009, Kessler and Vesterlund 2015, and this is true also for building economics and construction bidding research (Oo 2016).…”

“…Guala and Mittone (2005) referred this body of experimental knowledge as a 'library of robust phenomena'. Nonetheless, Oo (2016) pointed out that many researchers in the discipline are still reluctant to accept laboratory evidence due to the problem on generalizability (i.e., the external validity). There is not currently, and has never been a serious debate on the external validity of laboratory evidence and that adds to reluctance by researchers of using experiments in construction bidding research.…”

“…While the lack of realism and generalizability may not be an issue in field results, there are many noise factors in field bidding data that one should consider in data analysis as highlighted above. Experimental results, on the other hand, have contributed to a body of experimental knowledge in construction bidding on causal relationships between variables of interest via active manipulation of variables, which can only be achieved in an experimental setting (Oo 2016). Guala and Mittone (2005) referred this body of experimental knowledge as a 'library of robust phenomena'.…”