Introducing Uncertainty into Estimation of Effectiveness of Large-scale Regional Transport Projects: Structural Institutional Approach
Yevgeny Kibalov, Anatoly Kin
Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences, Novosibirsk
Keywords: large-scale capital investment projects, fundamental uncertainty, Hurwitz criterion, system analysis, macromodeling, institutional approach
Subsection: Economic Issues of Regional Development
Abstract
The paper presents that standard methods for estimating effectiveness of capital investment projects are deterministic. Uncertainty and risks are introduced and declared but not described with proper terminology. As far as large-scale capital investment projects are concerned, of which implementation influences the structure and price standards not only on departmental or regional markets but also on national ones, underestimation of «external effects», for instance, could lead to costly errors. To resolve this problem, we propose to utilize a strategy games model where contrasting scenarios are generated using models from a family of an optimization interregional-interindustrial model. The article also shows the results of experimental calculations and an example of how to use the described model.
|
