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Risk Evaluation of Social Decision Process: A Two-Stage Auction Game Model for Japanese Urban Redevelopment Procedure

  • Saburo SaitoEmail author
  • Mamoru Imanishi
  • Kosuke Yamashiro
  • Masakuni Iwami
Chapter
  • 575 Downloads
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 24)

Abstract

Under the scheme of Japanese City Renewal Law (JCRL), the cost of urban redevelopment project has been financed by the revenue from selling the reserved floor secured beforehand in the redeveloped building. Since the outcome of whether or not the reserved floor can be sold is unforeseeable, entities for redevelopment are faced with the risk for project financing. Traditional risk evaluation has just focused on the risk inherent in the project that is carried out by a single entity and whose future returns are uncertain. On the contrary, we focus on the risk of urban redevelopment project in which plural decision-makers are involved and whose future outcome becomes uncertain since it depends on the decisions made by other decision-makers involved. Defining the risk for the entities as the probability that the entities suffer a loss and formalizing urban redevelopment procedure as a two-stage auction game, we have demonstrated that we can evaluate numerically the actual amount of risk the entities are going to bear in the project by using hypothetical examples. To give more reality, we also show an application of our model to the actual instance of urban redevelopment project that was broken down to produce a huge amount of loss and see whether our model can infer its amount of loss.

Keywords

Risk evaluation Urban redevelopment procedure Game theory Auction model Bankruptcy Japanese City Renewal Law Social decision process 

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Copyright information

© Springer Science+Business Media Singapore 2017

Authors and Affiliations

  • Saburo Saito
    • 1
    • 2
    Email author
  • Mamoru Imanishi
    • 3
  • Kosuke Yamashiro
    • 4
  • Masakuni Iwami
    • 4
  1. 1.Faculty of EconomicsFukuoka UniversityFukuokaJapan
  2. 2.Fukuoka University Institute of Quantitative Behavioral Informatics for City and Space Economy (FQBIC)FukuokaJapan
  3. 3.Department of Business and EconomyNippon Bunri UniversityOitaJapan
  4. 4.FQBICFukuokaJapan

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