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on Project, Program and Portfolio Management |
| By: | Bent Flyvbjerg |
| Abstract: | This paper asks and answers the question of whether Kahneman's planning fallacy or Hirschman's Hiding Hand best explain performance in capital investment projects. I agree with my critics that the Hiding Hand exists, i.e., sometimes benefit overruns outweigh cost overruns in project planning and delivery. Specifically, I show this happens in one fifth of projects, based on the best and largest dataset that exists. But that was not the main question I set out to answer. My main question was whether the Hiding Hand is "typical," as claimed by Hirschman. I show this is not the case, with 80 percent of projects not displaying Hiding Hand behavior. Finally, I agree it would be important to better understand the circumstances where the Hiding Hand actually works. However, if you want to understand how projects "typically" work, as Hirschman said he did, then the theories of the planning fallacy, optimism bias, and strategic misrepresentation - according to which cost overruns and benefit shortfalls are the norm - will serve you significantly better than the principle of the Hiding Hand. The latter will lead you astray, because it is a special case instead of a typical one. |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1802.09999&r=ppm |
| By: | Bhaskar, Venkataraman; Thomas, Caroline |
| Abstract: | Why do political leaders or managers persist with their pet projects and policies despite bad news? When project continuation is a more informative experiment than project termination, a reputationally concerned leader is biased towards continuation, as it enables her to disclose her private information. Perceived overconfidence on the part of the leader aggravates this tendency, even when the leader is not, in fact, overconfident. Higher-order beliefs regarding overconfidence can induce inefficient equilibrium selection even when it is ``almost common knowledge" that the leader is not overconfident. Thus, a culture where leaders are expected to be overconfident can have undesirable effects even upon leaders who have correct beliefs. |
| Keywords: | Higher-order beliefs; Mis-specified models; Non-common priors; overconfidence; Policy persistence |
| JEL: | C73 D72 D82 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12740&r=ppm |
| By: | Karine Oganisjana (Riga Technical University); Anna Svirina (Kazan National Research Technical University); Svetlana Surikova (LU - University of Latvia); Gunta Grīnberga-Zālīte (Latvia University of Agriculture); Konstantins Kozlovskis (Riga Technical University) |
| Abstract: | The paper presents the analysis of a three-stage research conducted by the authors within a social innovation project in collaboration with international master students of Riga Technical University for determining the factors, which motivate people to be involved in the solution of social problems. The authors not only analyse and use the outcomes of the students' research but also provide feasibility study of using the potential of study research at the university, for implementing serious research projects. Data collection from Africa, Asia, America and Europe was organised jointly by all the students via web-based survey for creating an original data base for the collaborative use. The qualitative and quantitative content analysis of the respondents' texts revealed three groups of factors: intrapersonal, interpersonal and external factors which motivate people to be involved in the solution of social problems. Having conducted content analysis of the same texts and comparing the outcomes of the students' and their own research, the authors concluded that study research is worth being used for research projects. Keywords: social problems, social innovation, study research, learning research by doing research, qualitative content analysis Reference to this paper should be made as follows: Oganisjana, K.; Svirina, A.; Surikova, S.; Grīnberga-Zālīte, G.; Kozlovskis. K. 2017. Engaging universities in social innovation research for understanding sustainability issues, Entrepreneurship and Sustainability Issues 5(1): 9-22. http://doi. |
| Date: | 2017–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01708963&r=ppm |
| By: | Damien Besancenot (LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPD5 - Université Paris Descartes - Paris 5); Radu Vranceanu (Essec Business School) |
| Abstract: | Crowdfunding platforms are providing funds to an increasing number of projects, among which many have a strong social/community impact. Under a all-or-nothing program, the success of the investment depends on the ability of a crowd of potential investors to put their funds into the project without an explicit coordination device. With heterogeneous information, such a problem can be analyzed as a typical global game. We assume that signals of at least some agents present a systematic positive bias, driven by positive emotions about projects with high social/community impact. The analysis reveals that if the number of such overenthusiastic persons is large enough, crowdfunding finance might support financially inefficient projects. We then analyze how a monopolistic platform optimally determines transaction fees and unveil the relationship between overenthusiasm and the profit of the platform. |
| Keywords: | Crowdfunding,Entrepreneurship,Global games,Overenthusiasm,Behavioral IO |
| Date: | 2018–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01718793&r=ppm |
| By: | Ganglmair, Bernhard; Simcoe, Timothy; Tarantino, Emanuele |
| Abstract: | We study a dynamic model of the decision to continue or abandon a research project. Researchers improve their ideas over time and also learn whether those ideas will be adopted by the scientific community. Projects are abandoned as researchers grow more pessimistic about their chance of success. We estimate the structural parameters of this dynamic decision problem using a novel data set that contains information on both successful and abandoned projects submitted to the Internet Engineering Task Force (IETF), an organization that creates and maintains internet standards. Using the model and parameter estimates, we simulate two counterfactual policies: a cost-subsidy and a prize-based incentive scheme. For a fixed budget, subsidies have a larger impact on research output, but prizes perform better when accounting for researchers' opportunity costs. |
| Keywords: | dynamic discrete choice; Experimentation; learning; Standardization |
| JEL: | D83 O31 O32 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12733&r=ppm |