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Time overruns are common in public works and are not con...ned to inherently complex tasks. One explanation advanced in this paper is that bidders can undergo unpredictable changes in production costs which generate an option value of waiting. By exploiting the real-option approach, we examine how the inability to force sellers to meet the contract time in ‡uences their bidding behaviour, and how this can ultimately a¤ect the parties' expected payo¤s. Further, we examine the outcome of thedoi:10.2139/ssrn.2122297 fatcat:objc6tb3bfc6xgcbblp7zsjgv4