nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2015‒04‒11
nine papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Governments Should Not Use Declining Discount Rates in Project Analysis By Szekeres, Szabolcs
  2. Integrated Framework for Increasing the Effectiveness of Knowledge Networks: Roles of Network Providers and Users By Jain, Rekha; Singh, Manjari
  3. Estimating the size of external effects of energy subsidies in transport and agriculture By Commander,Simon John; Nikoloski,Zlatko Slobodan; Vagliasindi,Maria
  4. Relational Contracts with Subjective Peer Evaluations By Joyee Deb; Jin Li; Arijit Mukherjee
  5. Evaluation of a Rural Road Rehabilitation Project in Armenia By Kenneth Fortson; Randall Blair; Kathryn Gonzalez
  6. Derivatives Pricing using QuantLib: An Introduction By Varma, Jayanth R.; Virmani, Vineet
  7. Multi-processor Exact Procedures for Regular Measures of the Multi-mode RCPSP By Dayal Madhukar; Verma, Sanjay
  8. Explanations for strategic persistence in the wake of others’ failures By Amankwah-Amoah, Joseph
  9. Assessment and Action Plan to Improve Payment for Electricity Services in the Palestinian Territories By World Bank Group

  1. By: Szekeres, Szabolcs
    Abstract: A number of governments have already adopted the policy of applying Declining Discount Rates (DDRs) to long lived projects, a move that could affect public sector investment decisions. Arguments for the use of Declining Discount Rates are based on the consideration of uncertainty, both for discount rates derived from social welfare functions, and for those derived from the characteristics of capital markets. The case for the latter is based on Martin L. Weitzman’s assertion that certainty equivalent discount rates are a declining function of time and tend to the lowest possible interest rate when interest rates are stochastic but perfectly auto-correlated. This paper finds that this conclusion is the consequence of Weitzman’s use of time reversed negative compounding, rather than of discounting, in the definition of net present value. When discounting is used instead, Weitzman’s conclusions are reversed, and do not support the use of Declining Discount Rates.
    Keywords: Discount rate, uncertainty, declining discount rate, benefit-cost analysis, negative compounding
    JEL: D61 H43
    Date: 2015–04–03
  2. By: Jain, Rekha; Singh, Manjari
    Abstract: The National Knowledge Network (NKN) was set up to enhance collaboration amongst higher education (HE) and research institutes. The government of India implemented the NKN to provide connectivity to nearly 5000 institutions, including publicly funded higher education and research institutes. The objective of this paper is to provide an integrated framework for increasing the effectiveness of knowledge networks. We do this by identifying the organizational mechanisms, key processes and competencies required to support HE and research institutes in India that would enable them to exploit the public high speed National Knowledge Network. We examine this from the perspective of Knowledge Network Provider and User Institutes.
  3. By: Commander,Simon John; Nikoloski,Zlatko Slobodan; Vagliasindi,Maria
    Abstract: It is widely accepted that the costs of underpricing energy are large, whether in advanced or developing countries. This paper explores how large these costs can be by focussing on the size of the external effects that energy subsidies in particular generate in two important sectors?transport and agriculture?in two countries in the Middle East and North Africa, the Arab Republic of Egypt (transport) and the Republic of Yemen (agriculture). The focus is mainly on the costs associated with congestion and pollution, as well as the impact of underpriced energy for depletion of scarce water resources, including through crop selection. Quantifying the size of external effects in developing countries has received relatively little analytical attention, although there is a significant body of literature for developed countries. By building on earlier research, as well as employing the United Nations ForFITS model, the paper provides indicative estimates of the external costs of energy subsidies, as manifested in congestion and pollution. The estimates using simulations indicate that these costs could be materially reduced by elimination or reduction of energy subsidies. The paper also describes the impact of energy subsidies on water consumption in a region where water resources are particularly limited. The findings provide further evidence of the adverse and significant consequences of subsidizing energy.
    Keywords: Transport and Environment,Energy Production and Transportation,Transport Economics Policy&Planning,Climate Change Economics,Climate Change Mitigation and Green House Gases
    Date: 2015–04–01
  4. By: Joyee Deb (School of Management, Yale University); Jin Li (Kellogg School of Management, Northwestern University); Arijit Mukherjee (Dept. of Economics, Michigan State University)
    Abstract: We study optimal contracting in a setting where a firm repeatedly interacts with multiple workers, and can compensate them based on publicly available performance signals as well as privately reported peer evaluations. If the evaluation and the effort provision are done by different workers (as in a supervisor/agent hierarchy), we show that, using both the private and public signals, the first best can be achieved even in a static setting. However, if each worker is required to both exert effort and report on his co-worker’s performance (as in a team setting), the worker’s effort incentives cannot be decoupled from his truth-telling incentives. This makes the optimal static contract inefficient and relational contracts based on the public signals increase efficiency. In the optimal contract, it may be optimal to ignore signals that are informative of the worker’s effort.
    Keywords: Relational contracts, Subjective evaluation
    JEL: D82 D86
    Date: 2015–03
  5. By: Kenneth Fortson; Randall Blair; Kathryn Gonzalez
    Abstract: In this report, we present key findings of an impact evaluation of the Rural Road Rehabilitation Project (RRRP) in Armenia. The RRRP was originally conceived as part of a five-year, $236 million Compact between the Millennium Challenge Corporation (MCC) and Armenia designed to increase household income and reduce poverty in rural Armenia.
    Keywords: Rural Road Rehabilitation Project, Armenia, International
    JEL: F Z
    Date: 2015–03–12
  6. By: Varma, Jayanth R.; Virmani, Vineet
    Abstract: Given the complexity of over-the-counter derivatives and structured products, al- most all of derivatives pricing today is based on numerical methods. While large fi- nancial institutions typically have their own team of developers who maintain state- of-the-art financial libraries, till a few years ago none of that sophistication was avail- able for use in teaching and research. For the last decade„ there is now a reliable C++ open-source library available called QuantLib. This note introduces QuantLib for pricing derivatives and documents our experience using QuantLib in our course on Computational Finance at the Indian Institute of Management Ahmedabad. The fact that it is also available (and extendable) in Python has allowed us to harness the power of C++ with the ease of iPython notebooks in the classroom as well as for stu- dent’s projects.
  7. By: Dayal Madhukar; Verma, Sanjay
    Abstract: The multi-mode resource-constrained project scheduling problem (MM RCPSP) is an NP-hard problem representing a generalization of the well-studied RCPSP. Depth-first tree search approach by Sprecher & Drexl (1998) is the best-known exact solution tree search procedure for this problem. In this paper we modify an existing breadth-first algorithm for multiple processors. It is a computer-cluster implementation of the breadth-first procedure which improves the solution time taken for these problem instances.
  8. By: Amankwah-Amoah, Joseph
    Abstract: Purpose – Although strategic persistence remains a key issue in change management and strategy literature, our understanding of strategic persistence in the face of other businesses’ failure remains limited. This article examines factors that determine strategic persistence in the face of other businesses’ failures. Design/methodology/approach – Through a review and synthesis of the multiple streams of research, we provide a number of explanations for strategic persistence. The study complements the analysis with illustrative cases of failed companies. These led to development of an integrated framework of explanations for strategic persistence in the wake of other businesses’ failures. Findings – The analysis led to identification of individual, firm-specific and environmental factors rooted in past events (i.e. past successes, prior commitment and decisions by the top-management team), present circumstances (i.e. nature of the failure) and future outlook (i.e. paradox of success, looming threats and opportunities), which foster strategic persistence. We uncovered that persistence may also stem from factors such as “paradox of success” and “too much invested to quit”. Research limitation/implications – We suggest that organisations can learn from others’ failures without compromising their values by drawing on the expertise released by failed firms. The study also identified various mechanisms through which organisations can learn from the failure of others and factors that constrain them from doing so. Originality/value – Our theorisation and conceptualisation of the literature accommodates the multiple and contrasting perspectives of the subject such as the environmental buffers and paradox of success.
    Keywords: Business failure; Knowledge spillovers; Strategic persistence
    JEL: L0 L2 M1 M16
    Date: 2014
  9. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Access to Finance Energy - Energy Production and Transportation Private Sector Development - E-Business Energy - Electric Power Banks and Banking Reform
    Date: 2014–11

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