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An Agent Based Model for Exploring the Effects of Overconfidence on the Winner's Curse in Construction Projects
(01. Izmir Institute of Technology, 2022) Aldemir, Bora; Kale, Serdar
As a result of errors in cost estimation, the winning companies in competitive environments such as bids, auctions, etc. fail to achieve the anticipated profit or even incur losses. This phenomenon is labelled as the “winner’s curse.” Diverse causes led to the occurrence of this circumstance. Until recently, technical errors were thought to cause most construction estimation errors. Behavioral economics has shown that certain biases in individual decision-making can also contribute to these undesirable situations. Overconfidence is common. This illusion is when a person thinks they are better at making decisions than they really are. The agent-based modeling method was used to examine this bias. This method investigates the system pattern created by heterogeneous individuals with independent macro-level behavior. In this study, individuals can be considered as construction companies. The prevalent pattern in the sector is the phenomenon of the winner's curse. However, focusing solely on the overconfidence effect may not yield meaningful results. Risk aversion is regarded as a protective behavior against the negative effects of the overconfidence. There may also be a correlation between the number of bidders and the winner's curse. This study demonstrates that the phenomenon of the winner's curse exists in all dimensions of the overconfidence effect. When the number of bidders is small, overconfidence behavior has little impact on the winner's curse, but when the number of bidders is medium or large, the winner's curse increases slightly as the overconfidence effect decreases. Risk aversion does not provide any protection against the winner's curse phenomenon.
Assessment Model for Communication Maturity Levels of Construction Companies
(Izmir Institute of Technology, 2014) Bavunoğlu, Zeynep; Günaydın, Hüsnü Murat
Communication management systems are vital parts of organizational development and performance. Organizations have complex characteristics including decision making, information aggregation, management control, career concerns, goal setting and vertical and horizontal communication. In recent years, it has been found out that communication has an important effect on all these characteristics. But quantifying the effectiveness of the communication is difficult because it has many non-measurable variables. An effective communication can increase the level of effectiveness of the organization and the level of the effectiveness of communication system can be assessed by using maturity models. A maturity model describes the activities of processes and it impacts the performance of the organization. To find out the structure and maturity level of the communication system in a construction company, the Communication Capability Maturity Model (CCMM) is developed and its levels for communication maturity. To define a maturity level for a construction company, some variables of communication are measured as speed, the purpose, spread, clarity, shortness, scope and the other variables. The developed methodology uses a questionnaire survey. Survey has two parts; (1) organizational communication system and (2) emotions/moods of the employees. The results and analysis show that developed CCMM working properly and there are strong interdependencies between the variables (i.e. organizational communication system and moods, information, organization, team, individual and product). There is a negative moderate high correlation between communication capability maturity level (CCML) and negative moods. There is a moderate high correlation between the communication capability maturity level and level of emotional management behavior.

Phd Degree / Doktora

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