# A Real Option Pricing Decision of Construction Project under Group Bidding Environment
## 4 Conclusions and Prospects  
This research provides direct support for bidding price by establishing a real option pricing decision of the construction projects under group bidding environments, and the specific conclusions are as follows:  
(1) Based on the real option value theory, the competitive group behavior is divided into the independent and coupled bidding. By analyzing independent random competitive groups, the real option pricing theory is applied to the complete bidding price decision-making process. The analysis shows that the model has certain reliability and validity, improves the objective degree of the bidding decision-making environment and promotes the competitive ability of price decision making. (2) The changes in the optimal bidding price are proportional to the estimated costs, inversely proportional to the volatility level, option period, and independent of the number of competitors. However, the changes in the weighted option value are inversely proportional to the estimated costs, directly proportional to the cost volatility level and option period, and independent of the number of competitors. The sensitivity of the optimal price to the estimated costs, the costs volatility level and the option period are 35.06%, 9.77% and 7.70%, respectively, and the average optimal mark-up ratio is 1.078. Through the comparison of price decisions under independent and coupled bidding environments, it is found that the price group of competitors in the coupled bidding environment is more concentrated around the average value than the initial, and the optimal price of the enterprises increases significantly. The corresponding winning probability and the weighted option value also showed an upward trend, increasing by about 2.37%, 9.36% and 28.03%, respectively. (3) The results of the one-way sensitivity analysis of each parameter indicate that in the actual bidding process, the estimated costs and the option period should be estimated in the preparation stage. To improve the winning probability and obtain the higher option value, rely on the estimated fluctuation of the optimal bidding prices within a certain option period, increase the bidding price within a reasonable range when the market environment is more stable and lower the price to reduce the group deviation degree when the degree of uncertainty in the market environment is high, while postponing the timing of the estimated cost decision. At the same time, the cost is reduced as much as possible, the bidding price markup space is expanded, the sensitivity to the estimated costs is enhanced  
Figure 10: The concentration of the optimal bidding price. and the optimal markup ratio of the project is estimated according to the flexibility of decision making based on the group bidding pricing model. This research assumes that in a group bidding environment, an enterprise obtains its maximum value and optimal price decision by inferring bidding prices of independent or coupled competitors separately and jointly calculating. The results can be used in the bidding price decision, through the optimization of the price, to improve the winning probability. The model is applicable to project bidding with option concept, but some environmental parameters need to be optimized according to the characteristics of the industry and bidding group. In the actual bidding project, due to the limited construction engineering market resources, accurate prediction of the correlation level among the competitors is the premise of making a reasonable bidding decision. Future research should consider distinguishing bidding price coupling degrees among different competitors in the coupled bidding environment, to optimize the comprehensive price decision. At the same time, all parameters jointly determine the decision of joint restriction price. In the future, the coupling degree between parameters should be considered to explore the comprehensive decision under the influence of multiple factors. Methodology, M.L. and C.Z. ; supervision, M.L. ; writing--original draft, C.Z.