Investment Decision-Making for Transport Infrastructure Projects: optimizing vs. Satisficing

Abstract

Transport infrastructure development plays a crucial role in facilitating strategic economic growth in countries. However, optimizing project investment often requires a huge amount of resources and therefore the cost spent on such investments is a critical issue. Thus, decision-makers tend to fall back on conventional approaches such as cost-benefit analysis and use optimizing criteria. However, literature indicates that there are some issues with relying on optimizing criteria based on hard data, including that this approach is passive and lacks the important inclusion of key stakeholders’ perspectives and motivations. Consequently, investment transport infrastructure decisions made can be unaligned with the views of many project stakeholders, and these shortcomings can lead to problems. Therefore, it is essential to seek out a new approach to decision-making that can take advantage of the conventional approach but also reflect key stakeholders’ perspectives and motivations. In line with this goal, our paper proposes a novel approach, the use of ‘satisficing’ criteria applied within infrastructure project investment. The ‘satisficing’ approach will enhance decision-makers’ confidence as well as improving the outcomes of investment decisions and making them more feasible and sustainable.