To study fundamentals and applications of economic theories (e.g. microeconomics, transport economics, game theory and mechanism design) utilized for analyzing and evaluating infrastructure development. Also to study the practices of infrastructure-related economic policy.
Studying fundamental ways of economic thinking about infrastructure projects such as: (1) Microeconomic theory on costs and prices; (2) Economic evaluation method of infrastructure projects; (3) Economic analysis of transport policies; (4) Institutional design with economic incentives; (5) Fundamentals of governance theory; and (6) Energy industries and Private Finance Initiative (PFI).
Economics, Microeconomics, Transportation and Urban Economics, Public Economics, Market Failure, Externality, Economic Policy, Mechanism design
✔ Specialist skills | Intercultural skills | Communication skills | Critical thinking skills | Practical and/or problem-solving skills |
While theoretical foundations of economics are explained, mid-term exam will be set. The final exam will also be set.
Course schedule | Required learning | |
---|---|---|
Class 1 | Role of economic analysis for evaluating infrastructure develpment | - Infrastructure project and its economic analysis - History of cost benefit analysis - What is the economics way of thinking? |
Class 2 | Foundations of consumer behavior theory | - Consumption possible frontier (budget constraint) - Preference, utility, indifference curve, marginal rate of substitution - Choice (utility maximization) - Demand function, price/income elasticities - Consumer surplus and benefit calculation - Duality |
Class 3 | Foundations of producer/firm behavior theory | - Variable input, Fixed input, diminishing marginal productivity - Short term, Long term/Average, Marginal costs - Variable/Fixed Costs - Cost Minimization Problem and Cost Function - Production Technology - Profit Maximization and Production Function - Producer Surplus - Variable/Fixed Cost Functions |
Class 4 | Theory of market | - Law of Single Price - Price Taker and Price Maker - Market Equilibrium - Excess Demand/Supply - Partial/General Equilibrium - Consumer/Producer/Social Surplus - The 1st Theorem of Welfare Economics - Monopoly and Law of decreasing Marginal Cost, Oligopoly |
Class 5 | Market failure and its correction | - Monopoly - Externality - Congestion charging - Public goods |
Class 6 | Cost-benefit analysis | - Principle and history of cost benefit analysis - Social discount rate - Definition and measurement of economic benefit |
Class 7 | Exercises for economic evaluation of infrastructure facilities | - Cost-benefit analysis - General equilibrium model - Computable urban economic model |
Class 8 | Hidden actions and moral hazard problem | - Resource allocation problem - Examples of hidden actions - Purpose, classification and implementation of regulation |
Class 9 | Hidden information and adverse selection | - Hidden information / asymmetric information - Example of adverse selection problems |
Class 10 | Corporate governance and agency theory | - Partnerships - The Owner-Employee relationship |
Class 11 | Theory of auctions | - Vickrey type auction - Revenue equivalence theorem |
Class 12 | Public goods and preference revelation | - Pivotal mechanism - Groves mechanisms |
Class 13 | Structure of energy-related industry | - Current situation of energy related industries in Japan - Production and demand for energy resource in Japan |
Class 14 | History and prospects of utilization of private financing | - What is Private Finance Initiative? - Agency-based theory of contract |
Class 15 | Explanation of the final assignment | - Economic analysis of public policies |
Particularly not. Handouts will be circulated during the class and also be uploaded to OCWi.
The followings are all study-aid books.
- Takeuchi (2008) Introduction to transportation economics, Yuhikaku.
- Yamauchi & Takeuchi (2002) Transportation economics, Yuhikaku.
- Hatta (2009) Introduction to Microeconomics 1 & 2, Toyokeizai.
- Fujii (2010) Public works saving Japan, Bunshun.
- Campbell, D.E. "Incentives: Motivation and the Economics of Information (2nd Ed.)" Cambridge University Press, 2006.
Mid-term exam or report (40%), Final exam or report (40%), Small report & Small quiz (20%)
It is recommend to take "CVE.D201 : Fudamentals of Infrastructure Planning", "CVE.D210 : Planning Theory for Civil and Environmental Engineering" and "CVE.D301 : Traffic and Transportation Systems" in advance.