nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2018‒10‒01
five papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Evaluation of investment projects under uncertainty: multi-criteria approach using interval data By Olga A. Shvetsova; Elena A. Rodionova; Michael Z. Epstein
  2. Liberal Radicalism: Formal Rules for a Society Neutral among Communities By Vitalik Buterin; Zoe Hitzig; E. Glen Weyl
  3. Hydroelectric projects and territorial governance in regions of The State of Pará, Brazilian Amazon By Gilberto de Miranda Rocha; Marjorie Barros Neves
  4. How does the state destroy incentives in innovation financing? By Berlinger, Edina
  5. Incorporating Co-Benefits and Environmental Data into Corporate Decision-Making By Guertin, France; Polzin, Thomas; Rogers, Martha; Witt, Betsy

  1. By: Olga A. Shvetsova (Korea University of Technology and Education); Elena A. Rodionova (SPbPU - Peter the Great St. Petersburg Polytechnic University); Michael Z. Epstein (SPbPU - Peter the Great St. Petersburg Polytechnic University)
    Abstract: Multi-criteria decision making (MCDM) methods have evolved for various types of applications. In the past, even small variations to existing methods have led to the creation of new avenues for research. Thus, in this study, we review the MCDM methods in investment management and examine the advantages and disadvantages of these methods in a risk environment. In addition, we study the effectiveness of investment projects using these methods. The analysis of MCDM methods performed in this study provides a guide for the use of these methods, especially the ones based on interval data, in investment project analysis. Furthermore, we propose a combination of multi-criterial selection and interval preferences to evaluate investment projects. Our method improves on the method of calculating economic efficiency based on a one-dimensional criterion and sensitivity analysis, though our proposal involves complicated calculations.
    Keywords: multicriterial approach,Pareto set,risk management,investment project evaluation,investment project,interval data
    Date: 2018–06–29
  2. By: Vitalik Buterin; Zoe Hitzig; E. Glen Weyl
    Abstract: We propose a design for philanthropic or publicly-funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from Quadratic Voting to a funding mechanism for endogenous community formation. Individuals make public goods contributions to projects of value to them. The amount received by the project is (proportional to) the square of the sum of the square roots of contributions received. Under the "standard model" this yields first best public goods provision. Variations can limit the cost, help protect against collusion and aid coordination. We discuss applications to campaign finance, open source software ecosystems, news media finance and urban public projects. More broadly, we offer a resolution to the classic liberal-communitarian debate in political philosophy by providing neutral and non-authoritarian rules that nonetheless support collective organization.
    Date: 2018–09
  3. By: Gilberto de Miranda Rocha (Federal University of Para - Universidade Federal do Para [Belem - Brésil]); Marjorie Barros Neves (SEDEME)
    Abstract: The public and private institutional dynamics in the process of developing territories impacted by large hydroelectric projects have faced challenges over time in different aspects. The challenge is not only how to build participatory governance at different levels, but how to promote democratic and responsible vertical conceptions among actors at each level, considering the sharing of irreversible socioeconomic impacts caused by this enterprises in the Amazon. The construction of new relations between ordinary people and institutions-government, companies, society-forces the constant search for the establishment of strategies to establish social relations for the construction of models of territorial governance still in initial experiences in the state of Pará. To identify impacts, conflicts and territorial governance in areas of major projects: what has literature shown of experiences in the Amazon?
    Keywords: Hydroelectric Projects,Territorial Governance,Brazil,Legal Amazon
    Date: 2018–06–29
  4. By: Berlinger, Edina
    Abstract: We investigate the effect of state subsidy on the behavior of entrepreneur and venture capitalist in a double moral hazard and fixed investment model under positive externalities. We infer that investment subsidy and success fee improve the incentives, ease credit rationing, hence boost private financing, which explains the popularity of hybrid venture capital systems. The main disadvantage of these systems is, however, that the entrepreneur is encouraged to minimize his/her own capital investment and to ask for the maximal state subsidy available. It may happen that public sources go to entrepreneurs capable to finance their projects privately, so state subsidies increase state deficit (and private profits) without any effects on public welfare leaving other important areas underfinanced. We also prove that state guarantee definitely creates perverse incentives, hence it is not recommended in our model.
    Keywords: innovation financing, venture capital, state subsidy, moral hazard
    JEL: D21 G38 H32 H50 O38
    Date: 2018–09
  5. By: Guertin, France; Polzin, Thomas; Rogers, Martha; Witt, Betsy
    Abstract: This case study deals with The Dow Chemical Company’s (Dow) decision on how to restore a greenbelt area with historical issue that borders a brownfield property owned by the city of Midland, Michigan. Dow has a stated goal to apply a “business-decision process that values nature” and to deliver $1 billion in “value through projects that are good for business and good for ecosystems.” In line with this goal, Dow wanted to restore the greenbelt area by enhancing habitat and ecosystem services to Dow and Midland in a way that was also beneficial to the company’s bottom line. This case study presents three alternative restoration designs along with detailed financial cost and environmental data for each design. Students perform cost-benefit analysis, highlighting potential differences between how costs are calculated in a public setting relative to a private setting. In addition, students assess how the inclusion of important non-financial environmental data may be used to inform decision making.
    Keywords: Agricultural and Food Policy
    Date: 2018–08

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