Optimistic Bias Evaluation And Decision-making Risk Forecast On Bridge Project Based On RCF

China has taken the lion’s share of large scale projects in the world for almost three decades,in terms of both project amounts and singe project’s budget value,and is the leading country which conducts the most large scale projects.In the meantime,the decision making procedure involves,more or less,optimistic evaluation which leads to cost-overrunning and deferment.There is little existing research of decision making risks focused on the decision makers.In addition,the uncertain nature of large scale projects leads to an optimistic bias in their preliminary schemes.This paper evaluates the optimistic bias in China and constructs a model of decision making risks,in which creatively incorporates the expectation of optimistic bias and implicit social benefits.Therefore,this paper mitigates the possible mis-decision caused by cognitive errors and "strategic misrepresentation",meanwhile highlights the social attribute of major projects.This paper is based on the field work and interview of more than 30 major bridges in China,including cross-great river,cross-sea and cross-canyon bridges.This paper takes the approach of "reference class forecasting" method,examines the optimistic bias of China’s bridge project decisions from an outside view point,and predicts the budget of Zhu-Gang-Ao Bridge.The results show that China’s over spending bridge projects cluster about the high and low ends of over spending level,and the overall degree of over spending in China is lower than abroad.Based on the evaluation of optimistic bias,this paper constructs a model of the decision risks under the expectation of over spending.The model conducts a Monte Carlo simulation approach,takes the expectation of over spending and implicit utility into account,and controls the effects of over spending,implicit social benefits and operating period on project risk.This paper tests the case of Hangzhou Bay Bridge,and finds that there is huge implicit benefits and relatively small decision risk.In particular,the un-buildable risk is only 3%;the over spending risk is low till an over spending ratio of 100%,since the huge implicit utility;the safe margin of Hangzhou Bay bridge is 75 years of operating period.This paper contributes to the existing study of major project decision making risks,and the risk decision model,based on the expectation of over spending,provides practical value to decision makers to some extent.