nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒04‒11
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Optimal Project Selection Mechanisms By Talia Bar; Sidartha Gordon
  2. Search, Project Adoption and the Fear of Commitment By Talia Bar; Vidya Atal; Sidartha Gordon
  3. Shared leadership and performance in distributed teams: An examination of mediating mechanisms By Nabila JAWADI; Likoebe M. MARUPING; Nabila BOUKEF CHARKI
  4. Valuation of sequential R&D investment under technological, market, and rival preemption uncertainty By Michi Nishihara
  5. Policy commitment, legal and regulatory framework, and institutional support for PPP in international comparison: Indexing countries’ readiness for taking up PPP By Verhoest, Koen; Petersen, Ole Helby; Scherrer, Walter; Murwantara Soecipto, Raden
  6. Incentive contracts for environmental services and their potential in REDD By Fortmannm Lea; Salas, Paula Cordero; Sohngen, Brent; Roe, Brian
  7. Why Pay NGOs to Involve the Community? By Burger, Ronelle; Dasgupta, Indraneel; Owens, Trudy

  1. By: Talia Bar (University of Connecticut); Sidartha Gordon (Département d'économie)
    Abstract: We study mechanisms for selecting up to m out of n projects. Project managers’ private information on quality is elicited through transfers. Under limited liability, the optimal mechanism selects projects that maximize some function of the project’s observable and reported characteristics. When all reported qualities exceed their own project-specific thresholds, the selected set only depends on observable characteristics, not reported qualities. Each threshold is related to (i) the outside option level at which the cost and benefit of eliciting information on the project cancel out and (ii) the optimal value of selecting one among infinitely many ex ante identical projects.
    Keywords: adverse selection, information acquisition, mechanism design, project selection, limited liability, R&D.
    JEL: D82 O32
    Date: 2013–07
  2. By: Talia Bar (University of Connecticut); Vidya Atal (Montclair State University); Sidartha Gordon (Département d'économie)
    Abstract: We examine project adoption decisions of firms constrained in the number of projects they can handle at once. Adoption requires a commitment for a period of uncertain duration, restricting the firm in subsequent periods. Capacity constraints create a “fear of commitment” — some positive return projects are not adopted. In the sequential move dynamic game, the second mover sometimes adopts projects that were rejected by the first, even when both firms are symmetric and equally informed. We study the e§ects of competition on the fear of commitment, and compare the jointly optimal adoption decision to the behavior of strategic non-cooperative firms.
    Keywords: adoption, project selection, commitment, Markov perfect equilibrium
    JEL: L10 L13 D21
    Date: 2013–07
  3. By: Nabila JAWADI; Likoebe M. MARUPING; Nabila BOUKEF CHARKI
    Abstract: Shared leadership has emerged as an important determinant of team performance. However, the efficacy of such leadership in facilitating effective performance in distributed contexts is little understood. We extend theory by examining how shared leadership influences performance in distributed teams. Specifically, we focus on spatial, temporal, and configurational aspects of dispersion and how shared leadership enables teams to overcome the barriers posed by these forms of dispersion. We conducted a five-month study of ten distributed teams to examine shared versus concentrated leadership. Results of the study suggest that highly distributed teams achieve high performance when leadership influence in team coordination and monitoring processes is distributed across multiple team members. In contrast shared and concentrated leadership both seemed to facilitate high performance in less distributed teams. Further, we found that shared leadership in coordination processes was particularly important in facilitating effective communication patterns and, ultimately, high performance. The implications of our findings for theory are discussed.
    Keywords: shared leadership, team dispersion, team performance, team processes, virtual interaction.
    Date: 2014–03–28
  4. By: Michi Nishihara (Graduate School of Economics, Osaka University)
    Abstract: We develop a real options model for evaluating and optimizing an R&D project. The model can capture key features of R&D, including research duration, growth opportunity, debt financing, and uncertainty of technological, demand market, and rival preemption. Nevertheless, it is computationally tractable and thus helps practitioners to evaluate various cases of R&D investment. Further, by analyzing the model with a wide range of parameter values, we unveil the interactions of key R&D features. The effect of duration on investment depends on whether there is a possibility of rival preemption. Higher uncertainty of research duration speeds up project inception in the presence of rival preemption. Higher uncertainty of technological success, combined with a growth opportunity embedded in the R&D project, accelerates investment. Debt financing can greatly decrease time lag between the first stage project and growth project. These results are consistent with the empirical evidence.
    Keywords: R&D; technological uncertainty; investment lag; real options; compound option.
    JEL: G31 G33
    Date: 2014–04
  5. By: Verhoest, Koen (University of Antwerp); Petersen, Ole Helby (University of Roskilde); Scherrer, Walter (University of Salzburg); Murwantara Soecipto, Raden (University of Antwerp)
    Abstract: Abstract In this paper we develop an index of the governmental support for PPP – a ‘PPP Governmental Support Index’ - which aims to measure the extent to which national governments provide an institutional framework that is either conducive or preventive for the introduction and diffusion of PPPs within infrastructure. First, based on a substantive review of the literature we define the elements of the PPP Governmental Support Index, including the policy and political commitment regarding PPPs, the legal and regulatory framework regarding PPPs, as well as the presence/absence of PPP-supporting structures and instruments (PPP-units, procedures for project appraisal and green lightning, and standardization of instruments and contracts). Second, we calculate the ‘PPP Governmental Support’-index for 15 European countries, cluster them and compare similarities and differences in national institutional support of PPPs. Third, we present a first and preliminary exploration of a potential link between national institutional index scores and the number and capital value of implemented PPP projects. Lastly, we discuss the potential and usefulness as well as methodological limitations of the presented PPP Governmental Support Index and elaborate on how this index might be utilized to strengthen future comparative PPP research.
    Keywords: Public-private partnerships; -comparative index; country rankings; institutional framework; COST Action TU1001.
    JEL: L32
    Date: 2014–04–08
  6. By: Fortmannm Lea; Salas, Paula Cordero; Sohngen, Brent; Roe, Brian
    Abstract: Implementation arrangements for Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation can be seen as contracts that could address some of the inherent problems with forest carbon credits that often lead to high transaction costs -- measuring, monitoring, and verification. Self-enforcing contracts, where it is in the best interest of the environmental service providers to comply with the contracts, may be one way to reduce these costs if providers have incentives to uphold their end of the contract. While the literature on Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation is extensive, there is little information available to guide policy makers or investors on what form such contracts should take. After providing an overview of the current status of Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation and its role as a tool for reducing carbon emissions on an international scale, the paper describes key issues regarding implementation and reviews the literature on contracts from the related area of Payments for Ecosystem Services programs, which face similar challenges. The remainder of the paper reviews various contractual mechanisms from agricultural and forestry related projects that have been proposed or are being used in practice and discusses the various implications associated with their design and implementation.
    Keywords: Climate Change Mitigation and Green House Gases,Environmental Economics&Policies,Climate Change Economics,Debt Markets,Environment and Energy Efficiency
    Date: 2014–04–01
  7. By: Burger, Ronelle (Stellenbosch University); Dasgupta, Indraneel (Indian Statistical Institute); Owens, Trudy (University of Nottingham)
    Abstract: We examine the case for donors providing financial incentives to NGOs to increase community participation. We show that, when such incentives are provided, there need not exist any meaningful relationship between beneficiary welfare and the extent of community participation implemented by an NGO. Higher community participation is consistent even with reduced beneficiary welfare. Thus, eliminating community participation from the set of conditions for funding an NGO may improve beneficiary welfare. We provide evidence from the NGO sector in Uganda consistent with our theoretical conclusions. Beneficiaries themselves do not appear to perceive community participation as generating appreciable value-addition in project output.
    Keywords: regulation of non-governmental organizations, developing countries, community participation, Uganda
    JEL: I38 L31 L38
    Date: 2014–03

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