Suppose we have a 0-1 output for whether a bidder wins a contract in a bidding model (0=bidder does not win contract, and 1=bidder wins contract). From the mean of this output, what can we determine?
A) the mean number of bidders
B) the average winning bid
C) the probability that the bidder will win the contract
D) the standard deviation of the next highest competitor's bid
E) none of these choices

Question

Quizplus · Accepted Answer

The mean output of 0 or 1 represents the proportion (or percentage) of bidders who win the contract. This can be interpreted as the probability of winning the contract, given that the bidder participates in the bidding process. The mean does not provide information about the number of bidders, the winning bid, or the standard deviation of the next highest competitor's bid.

Suppose We Have a 0-1 Output for Whether a Bidder