APPLICATION OF BAYESIAN STRATEGY OF COLLECTIVE DECISION-MAKING TO RESOLVE THE SOCIO-ECONOMIC PROBLEM OF KYIV CITY

Innovative Biosystems and Bioengineering

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Title APPLICATION OF BAYESIAN STRATEGY OF COLLECTIVE DECISION-MAKING TO RESOLVE THE SOCIO-ECONOMIC PROBLEM OF KYIV CITY
APPLICATION OF BAYESIAN STRATEGY OF COLLECTIVE DECISION-MAKING TO RESOLVE THE SOCIO-ECONOMIC PROBLEM OF KYIV CITY
 
Creator Zhukovska, O. A.; National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”
Manko, Y. R.; National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”
 
Subject

економічне моделювання
investment project; making collective decisions; expert evaluation; Bayesian strategy; optimal solution; public-private partnership
 
Description This article considers an implementation of a constructive scheme of collective decision-making, which is based on the Bayesian strategy, for the selection of investment projects to solve the socio-economic problem of Kyiv city. The relevance of this study is that in the absence of an objective and transparent system for selecting investment projects and with a limited regional budget, the government should accept only those investment projects that bring the greatest socio-economic benefits. The main ways of state investment in projects aimed at improving socio-economic problems are considered. Among them are the State Fund for Regional Development and the public-private partnership program. It is determined that a significant advantage of public-private partnership over the State Fund for Regional Development is the ability to attract both public funds and private investment. Three projects aimed at solving the problem were selected from the website of the Kyiv Investment Agency, which operates within the framework of a public-private partnership. The financial indicators of their profitability were calculated – NPV (net present value), IRR (internal rate of return) and PI (profitability index). They are based on the concept of incoming and outgoing payments during the period of project execution. It is determined that these indicators do not always give a consistent result, as well as their main drawback – the inability to assess the social component. According to the methodology of collective decision-making by a group of independent experts in terms of the minimum average probability of error, calculations were made to determine the most attractive project. It is noted that all experts make decisions separately and independently of each other. Recommendations were provided for the selection of a specific project. The study identifies the advantages of this method of project acceptance for investment: objectivity, consistency and transparency. In the future, it is planned to incorporate risks into the decision-making model.The main areas that need improvement were considered, and key ones were selected. The most problematic and urgent is the issue of waste recycling in Kyiv.
This article considers an implementation of a constructive scheme of collective decision-making, which is based on the Bayesian strategy, for the selection of investment projects to solve the socio-economic problem of Kyiv city. The relevance of this study is that in the absence of an objective and transparent system for selecting investment projects and with a limited regional budget, the government should accept only those investment projects that bring the greatest socio-economic benefits. The main ways of state investment in projects aimed at improving socio-economic problems are considered. Among them are the State Fund for Regional Development and the public-private partnership program. It is determined that a significant advantage of public-private partnership over the State Fund for Regional Development is the ability to attract both public funds and private investment. Three projects aimed at solving the problem were selected from the website of the Kyiv Investment Agency, which operates within the framework of a public-private partnership. The financial indicators of their profitability were calculated – NPV (net present value), IRR (internal rate of return) and PI (profitability index). They are based on the concept of incoming and outgoing payments during the period of project execution. It is determined that these indicators do not always give a consistent result, as well as their main drawback – the inability to assess the social component. According to the methodology of collective decision-making by a group of independent experts in terms of the minimum average probability of error, calculations were made to determine the most attractive project. It is noted that all experts make decisions separately and independently of each other. Recommendations were provided for the selection of a specific project. The study identifies the advantages of this method of project acceptance for investment: objectivity, consistency and transparency. In the future, it is planned to incorporate risks into the decision-making model.The main areas that need improvement were considered, and key ones were selected. The most problematic and urgent is the issue of waste recycling in Kyiv.
 
Publisher КПІ імені Ігоря Сікорського, ФММ
 
Contributor

 
Date 2021-11-17
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion

 
Format application/pdf
 
Identifier http://ape.fmm.kpi.ua/article/view/216689
 
Source «ACTUAL PROBLEMS OF ECONOMICS AND MANAGEMENT"; № 15 (2021)
Актуальні проблеми економіки та управління; № 15 (2021): Актуальні проблеми економіки і управління, №15, 2021
2410-4973
 
Language eng
 
Relation http://ape.fmm.kpi.ua/article/view/216689/pdf_59
 
Rights Copyright (c) 2020 O. A. Zhukovska, Y. R. Manko

 

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