Introducing Uncertainty into the Estimation of Effectiveness of Large Regional Transport Projects: Structural-Institutional Approach

E.B. Kibalov(lf@online.nsk.su) and A.A. Kin (kin_a@ieie.nsc.ru)

Journal "Region: Economics and Sociology", 2014, vol. 2

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 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 issue, 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

Keywords: large capital investment projects; regional transport systems; uncertainty; risks; efficiency; estimations; strategy games; economic and mathematic model of MMM (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:nos:regioe:2014-2_5

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